Social Security Says Goodbye to Paper Checks

In March, Social Security will stop mailing checks to all but a small percentage of retirees. About 5 million seniors still get their benefits in the form of a check - and if you are one of them, what alternatives do you have for the future?1

The new options: direct deposit or a Direct Express debit card. Most Social Security recipients receive their benefits by direct deposit – that is, the Treasury Department sends an electronic message to a bank or credit union crediting the retiree’s account with the amount of the payment.2

Since 2008, about 3 million Social Security recipients have opted to use the Direct Express MasterCard, a Treasury-recommended prepaid debit card. On payment day each month, the amount of the Social Security payment is automatically credited to the card. About two-thirds of Direct Express card users were “unbanked” when they signed up for the card – that is, they had no bank account of any kind.1,2

The debit card has some drawbacks. While it carries no monthly fees or overdraft charges, you get one fee-free ATM withdrawal a month with it – provided you make that withdrawal at one of the 50,000 ATMs in the network for the card. Additional withdrawals within the ATM network have 90-cent fees attached, and you will incur the usual $1.50-3.00 ATM fee per withdrawal at banks outside the network. On the other hand, retirees can save a bit of money – maybe as much as $5 a month or $60 a year in checking fees – if they simply go the direct deposit route.1,3

The change will be encouraged, not demanded. While the Treasury Department’s Go Direct website ( gives the impression that Social Security will abruptly stop sending out checks on March 1, this is not exactly the case.2

“We will not interrupt payments if a person does not comply nor will we switch a payment method automatically,” Walt Henderson, director of the GoDirect program, told the Detroit Free Press. By March, seniors getting checks from the program may get a letter offering assistance to help them change over to the debit card or direct deposit option. “You will still get a paper check,” Henderson stated to the Washington Post, “but you will be hearing from us in a more personal way.”1,3

What if you still want a check in the mail? Call the Treasury Department’s Go Direct hotline at 800-333-1795 and request a waiver. Waivers may be granted if a retiree lives in a rural area, or if certain mental impairments make the electronic deposit or debit card options too confusing.2

Some seniors will continue to get checks. If you were born on or before May 1, 1921, you get an automatic waiver – you will still get your Social Security income by check unless you want to change to one of the other options.1

Why is this move being made? The federal government can save some money this way. It costs 92 cents more to print and mail a check to a Social Security recipient compared to electronic payment methods. By ending the printing of Social Security checks, about $1 billion in federal savings can be realized over the next decade.3

In addition to Social Security payments, other kinds of federal payments will also be converted to electronic delivery starting March 1 – paper checks are on the way out this spring for Supplemental Security Income payments, Veterans Affairs benefits, Railroad Retirement Board or Office of Personnel Management benefits, and other assorted non-tax federal payments as well.3


  2. [2/12/13]
  3. [1/12/13]


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