The Tribune Democrat, Johnstown, PA

January 17, 2013

Gov’t phasing out paper checks

Justin Dennis
jdennis@tribdem.com

JOHNSTOWN — Those collecting federal benefits by mail are being urged to switch to electronic deposit as the days of the paper check are numbered.

The Treasury Department is trying to increase awareness and disseminate all the information necessary for beneficiaries to avoid problems with their federal aid.

Beginning March 1, those who receive benefits by mail from the Social Security Administration (including Supplemental Security Income, or SSI), Veterans Affairs (VA), the Railroad Retirement Board, the Office of Personnel Management or the Department of Labor (Black Lung) will be required to set up an electronic method for receiving benefit checks.

Recipients are being directed to call 800-333-1795 (open Monday through Friday, 8 a.m. to 8 p.m. EST), visit www.GoDirect.org or meet with their local paying agency office to sign up. The process is free.

“We have a team of friendly, helpful agents standing in at our call center,” David Lebryk, commissioner of the department’s Financial Management Service, said in a release. “Many financial institutions, caregivers, senior services providers and advocates for people who are homeless or have disabilities have the necessary information and resources to help federal benefit recipients make the switch.”

In Pennsylvania, nearly 181,000 Social Security and SSI checks are mailed each month, and 5 million are sent out nationwide. This only accounts for roughly 7 percent of all benefit payments, however. The rest are electronic.

It’s the end result of a 2010 decision by the department to gradually “phase out” paper checks benefit payments.

According to the department, all of those saved trees will figuratively become currency over the next 10 years – to the tune of $1 billion in saved tax dollars.

Since May 2011, all new federal aid applicants have been given two choices as to how their money will be electronically deposited. Although federal beneficiaries may have their own unique situation, there’s one thing all aid recipients have in common: They’re going to have to complete this process, if they haven’t already.

“Switching to electronic payment is not optional,” said Lebryk. “It’s the law.”



No bank account? No problem!



The two choices recipients have are setting up direct deposit for an existing bank account or choosing the Direct Express Debit Mastercard.

 Appearances aside, the latter isn’t actually a line of credit, and is the only option for those without bank accounts.

The Direct Express card is a prepaid debit card specifically designed for federal benefits.

Beneficiaries can use the card just like any other debit card – at network ATMs, online or at the register – anywhere MasterCard is accepted. Unlike a checking account, recipients won’t have to pay any fees, and there’s no minimum account balance to keep.

Only one free ATM withdrawal is allowed per month, however, and only after that month’s deposit is posted.

Extra ATM withdrawals are 90 cents each.

Recipients who miss the electronic payment sign-up deadline will be contacted by mail, according to Walt Henderson, director for the Go Direct campaign.

“We don’t want to cause any sort of disruption,” he said. “But we do want to help them comply with the requirements.”

Those who already have a bank or credit union account can sign up for direct deposit through their bank, provided the service is offered.

Nursing homes and assisted living facilities that serve as the representative payee for recipients can find additional information at the Go Direct website, under the Skilled Nursing Facilities page.

After recipients have signed up, Henderson said the electronic deposits will take effect in one to two months.



‘I wouldn’t have it any other way’



Local beneficiaries who have already taken the plunge say they enjoy the simplicity, promptness and peace of mind that comes with electronic transactions.

“It turns up in the bank on the day they tell you it will,” said Tom Scullion of Westmont, who said he’s handled his finances electronically since 1996 and doesn’t usually carry cash. “And it’s the safest way because nobody can steal it.”

And it’s true: SSI checks left in mailboxes and large sums of money being carried to the bank by the elderly can be inviting targets for thieves.

Henderson cited more than 440,000 paper checks that were reported stolen last year, including $70 million in benefit checks that were fraudulently endorsed. Handling money electronically circumvents this, and more can be accomplished in less time.

“I can pay five bills in five minutes (online) – no postage,” he said. “Personally, I wouldn’t have it any other way.”

For Sandy Paskowski of Summerhill, the sign-up process was quick and painless.

“All you do is give your account number,” she said. “They take care of everything else. It's a really safe way of doing it.”

So, what are the last 7 percent waiting for?

“I think the biggest issue is procrastination,” Henderson said. “Secondly, I think there are misconceptions about electronic payment or direct deposit. A lot of our efforts in the Go Direct campaign are educating people and relieving any fears or misconceptions about how it works.”

“They say you can't teach an old dog new tricks,” said Paskowski. “But now, we're almost forced to learn these things. I think it's a good thing."

See a list of frequently asked questions about the benefits switch at www.GoDirect.org/

about-faq.

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