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Paperless Banking Extends to Social Security Benefits


Posted on Feb 10, 2011

Starting in May, people who are eligible for Social Security or Welfare benefits will no longer receive paper checks through the mail. In a growing trend of paperless banking and a reduced need for paper checks, the money will be direct deposited into a bank account if the recipient has one; or made available on a debit card. For the 10 million people currently receiving Social Security or Welfare checks, they will be required to switch to direct deposit or debit card as of March 2013.

Why Checks Are Being Eliminated

The government believes paperless banking will stop theft which accounted for $93 million in Treasury check fraud in 2010, and reduce costs of providing Social Security and Welfare benefits by $120 million per year. Additionally, the commissioner of the department's Financial Management Service, David A. Lebryk, said that during disasters where the delivery of mail becomes impossible - direct deposits and debit card funding will be available which means people will still receive their income during such disasters.

Cultural and Social Impact

Many recipients of Social Security funds are elderly adults who simply feel more comfortable having the physical check in their hand on the first of each month. Without it, some people feel they have less control over their finances and there tends to be opposition toward this change in how benefits are received among the elderly community. Not only does it require changing how these people have done their banking for years; but it also eliminates a social aspect many seniors look forward to - the act of visiting their local bank to deposit their check and saying hello to the bank tellers each month.

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