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Eye Opener: Federal benefits payments go paperless

By Ed O'Keefe

Eye Opener

Happy Monday! The well-worn phrase, "Your check is in the mail" may be rendered obsolete by the federal government in the next three years.

The Treasury Department plans to make most Social Security and other federal benefits payments by direct deposit by 2013, it will announce Monday. The decision impacts about 136 million checks sent by the Social Security Administration, Department of Veterans Affairs, Railroad Retirement Board and Office of Personnel Management.

The switch is part of a broader plan to shift away from paper-based payments and transactions that will also require businesses currently using Federal Tax Deposit coupons to move to electronic tax payments. The Treasury also plans to cut the purchase of paper savings bonds through payroll sales. The plan should save taxpayers about $400 million in processing, postage and paper costs in the first five years, the Treasury said.

Americans who enroll on or after March 1, 2011 for benefits payments will receive them by direct deposit or be enrolled in the government's Direct Express Debit MasterCard program if they do not provide bank account information. Beneficiaries currently receiving payments will switch to direct deposit or the debit card by March 1, 2013 after agencies inform them of the changes.

Treasury officials said direct payments remove the risk of people stealing checks out of the mail and ensure that payments get to people uprooted by natural disasters or ill and unable to get to the bank. Previous attempts at mandating direct payments have failed because the government had not established the debit card program for people who do not have bank accounts, said Assistant Treasury Secretary Richard L. Gregg.

"Now we have it, it's a proven card and we think it's a very good alternative for people who don't have bank accounts," Gregg said.

The Obama administration recently also stopped issuing paper pay stubs to some federal employees.

Sound like a good idea? Should it have happened sooner?

Leave your thoughts in the comments section below

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By Ed O'Keefe  | April 19, 2010; 6:00 AM ET
Categories:  Agencies and Departments, Eye Opener  
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I find that my only need for the Post Office is to receive communications from government. With this change by the federal government, how can the Post Office survive? Almost all my mail today, and other people whom I know agree, is junk mail. The Post Office can not stay in business for that.

Posted by: Desertstraw | April 19, 2010 7:44 AM | Report abuse

They will still have to use the Post Office to send the debit cards...

However, with SS checks, and people at work during the week... and no Saturday mail delivery...

Smart move.

Posted by: eryanwhite | April 19, 2010 10:13 AM | Report abuse

Perhaps the top SEC officials in FW have or had conflict of interests in the handling of ponzi scheme complaints such as Stanford and others. Those officials should be subjected to intense scrutiny and properly punished if found derelict in the mishandling of those complaints.

Posted by: fishhook08 | April 19, 2010 11:54 AM | Report abuse

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