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Direct Deposit of Fed Benefits?


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If you get a check in the mail for your federal benefits, changes are coming. The Treasury Department will soon switch from paper checks to direct deposit payments of federal benefits, including Social Security, Veterans Affairs payments and pension benefits.

About 8 of every 10 Americans already receive federal benefits electronically, so most will not see a change. If you object to direct deposit, there is another option: a Direct Express MasterCard debit card with no sign-up, monthly, or overdraft fees. About 1.5 million people have signed up for the debit option since it was introduced in 2008.

It is estimated that phasing out paper checks will save Social Security $1 billion over the next decade. The federal government has been transitioning to electronic deposits of benefits because it is considered the safest and most reliable method. Treasury believes it lowers the risk of identity theft, and eliminates problems like losing a check, or having one taken from your mailbox.

If you currently receive Social Security or other federal benefits by check, you can learn how to switch to direct deposit or the debit card by calling toll-free 800-333-1795. In addition, you can visit You will need to switch to electronic payments by March 1, 2013.

Treasury, after hearing concerns from consumer advocates, will permit some to continue receiving regular paper checks, including those who are 90 years or older and some who live in very remote areas. Please call 800-333-1795 with any questions.

New applicants for federal benefits will receive payments electronically starting in May 2011.

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