By Mark Miller
CHICAGO Jan 10 A procrastinators' alert: anyone
who gets a benefit check from the federal government has less
than two months to go paperless.
March 1 is the deadline for nearly everyone who receives
Social Security, Supplemental Security Income (SSI) or veterans'
benefits to switch to the government's new electronic payment
system. The Go Direct program - launched in 2005 - has already
converted 93 percent of all benefit payments; new recipients
have been all paperless since 2011.
After March 1, the only remaining exceptions will be
beneficiaries over age 90, residents of remote areas that lack
electronic payment options, or people with mental impairment
issues that hamper their ability to manage finances.
Folks who don't meet the deadline will continue to receive
their benefit checks, officials concede. But they also can
expect to hear from the federal government, which will be
intensifying efforts to finish the conversion after March 1.
The shift is expected to save the government $1 billion over
ten years. Processing and distributing an electronic payment
costs just 10 cents, compared with $1 for a paper check, says
Walt Henderson, director of the Go Direct campaign at the U.S.
Department of the Treasury.
Electronic payment also is better for consumers: payments
are available immediately as cash, and there's no possibility of
delayed or lost checks - as seniors affected by Hurricane Sandy
experienced in November when delivery of hundreds of thousands
of checks via the U.S. Postal Service were delayed.
Five million beneficiaries still haven't converted. If
you're among them, you've got two basic options: direct deposit
to a bank account, or sign up for a Direct Express debit card to
access benefits without using a bank account.
Electronic deposit to a checking account is the best
approach, because it offers the greatest withdrawal flexibility.
You will be subject only to whatever overall account limits and
fees you've already agreed to on your account. But one-third of
the beneficiaries still receiving paper checks are "unbanked," -
meaning that they don't have a checking account, Henderson says.
Many of these beneficiaries are low-income or disabled
recipients of SSI.
If you can't qualify for or afford a standard checking
account, there is still a second-best choice for consumers
reluctant to use the debit card approach: You can open an
electronic transfer account (ETA) - a special low-cost bank
account - at a participating bank or credit union. ETA account
fees cannot exceed $3 per month, and you can make at least four
free cash withdrawals per month. However, just 316 providers
have joined the ETA program so far - "not as many as we'd like,"
Henderson says. Details at www.eta-find.gov/
The Direct Express debit card is the least attractive
option, because it carries additional fees and limitations.
You're entitled to one free cash withdrawal for each deposit
credited to your account per month, as long as you use one of
the 60,000 ATMs in the program's surcharge-free network. A 90
cent fee is charged for additional in-network withdrawals, and
higher fees can be charged if you use an ATM at a bank that does
Henderson notes that it's also possible to make unlimited
free withdrawals by using Go Direct to make purchases at any
retailer accepting MasterCard debit cards. "You can use
it to make purchases and get cash back, just like any debit
card," he says. "Why bother to get cash out to use at the store
when you can just use the card?"
Another concern is identity theft that allows fraudsters to
divert benefit payments. Relatively few cases have been
reported. The Social Security Administration Office of the
Inspector General said in November that it had logged more than
19,000 reports of possible unauthorized changes or attempts to
make changes to direct deposits. That's a tiny fraction of the
five million benefit checks mailed by the government each month.
However, the elderly are especially susceptible to financial
fraud, and a lost benefit payment can be devastating to seniors
or low-income recipients on fixed income who depend on monthly
benefits to meet living expenses. Henderson says the Treasury
Department and the Social Security Administration have been
beefing up safeguards. He notes, however, that even in cases of
fraud, beneficiaries are held harmless and that the Social
Security Administration quickly replaces lost benefits.
HOW TO SIGN UP
Determine which option is best for you by calling the
program's toll-free call center at 1-800-333-1795 or its website
Before calling the toll free number, have at the ready your
most recent benefit check and payment amount and your Social
Security number. If you are planning to use direct deposit to a
bank account, also have your financial institution's routing
number and your own account number on hand. Also use the call
center toll-free number if you want to apply for an exemption.
What will happen to procrastinators who haven't converted by
the March 1 deadline?
"Police won't be knocking on your door, but we will
contacting people directly by mail," Henderson says.