Social Security recipients will no longer receive paper checks. They will need to get them by wire or via a debit card. The news means a decades-long practice by which people received checks by mail is over. The decision will make life difficult for millions of older Americans.
The news was announced on a July 15 blog from the Social Security Administration (SSA) titled “Social Security Transition to Electronic Payments—What Beneficiaries Receiving Paper Checks Need to Know.” The system is two months away and starts on September 30.
The blog read: “By moving to electronic payments exclusively, we aim to improve efficiency, security, and ensure beneficiaries receive their monthly benefits promptly.” That will not help people who do not have a bank account. That number is about 6% of the population. Among people who live in poverty (identified as people with an annual income of less than $25,000), the figure is 23%.
People who get or will get Social Security have two challenges under the current system. Those who do not have an account will need one. The SSA writes, “Beneficiaries should enroll in direct deposit with their financial institution.”
The other form of payment involves the use of a debit card. “For people without a bank account, the Direct Express card is a prepaid debit card designed specifically for federal benefit payments.” That is hard for people who do not know how to use a debit card and how to track a debit card balance. People who want this second type of payment have to sign up online.
There are very rare expectations for the new plan. People who are over 90 can still get checks. Another category is those for whom “electronic payments would impose a hardship due to a mental impairment.” So is people who “live in a remote geographic location lacking the infrastructure to support electronic financial transactions.” Everyone else has to use the new system, which the federal government says will save it money.
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