Search Form
First, enter a politician or zip code
Now, choose a category

Public Statements

Chairman Johnson Announces Hearing on the Direct Deposit of Social Security Benefits

Press Release

Location: Unknown

U.S. Congressman Sam Johnson (R-TX), Chairman of the House Committee on Ways and Means Subcommittee on Social Security, announced today that the Subcommittee will hold a hearing to examine the impact on beneficiaries of direct deposit of Social Security benefits. The hearing will take place on Wednesday, September 12, 2012 in B-318 Rayburn House Office Building, beginning at 9:00 a.m.

In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only. However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Subcommittee for inclusion in the printed record of the hearing. A list of invited witnesses will follow.


The Debt Collection Improvement Act (DCIA) of 1996 (P.L. 104-134) required all federal payments, including Social Security benefits, to be made through electronic funds transfer (EFT) beginning in January 1999. In order to mitigate the hardships this mandate would impose on those who lacked access to accounts at financial institutions, the law provided the U.S. Department of the Treasury (Treasury Department) with broad authority to define exception categories and grant waivers from this requirement. The Financial Management Service (FMS) at the Treasury Department, responsible for disbursing federal benefits (of which Social Security and Supplemental Security Income (SSI) benefits account for approximately 89 percent of all benefit payments), issued agency rules and implemented several initiatives to encourage greater use of EFT.

In 2005, FMS launched the "Go Direct" campaign targeted at paper check recipients to emphasize the benefits of electronic payment. Following pilot testing, in 2008, FMS launched the Direct Express® Debit MasterCard®, a reloadable, low-fee debit card that allows recipients to receive benefits on an electronic card without having a bank account. The card allows recipients to use the card wherever MasterCard® is accepted and to obtain cash at an Automated Teller Machine or through cash-back purchases. Benefits may also be disbursed onto private label reloadable debit cards, if they meet certain Treasury requirements. Since the DCIA was signed into law, the volume of all Social Security benefits disbursed electronically has grown from 56 percent to over 90 percent today.

To advance the goal of disbursing 100 percent of benefits through EFT, Treasury issued a final amended rule (31 CFR Part 208) in 2010, requiring all new beneficiaries to receive their benefits via electronic payment, with limited exceptions, beginning May 1, 2011. In addition, by March 1, 2013, the rule requires all individuals receiving paper payments to choose an electronic payment option, such as direct deposit, a Direct Express® card, or another reloadable debit card. At the time of the final rule, Treasury estimated that mandatory electronic benefit payments would save the Social Security Administration (SSA) $1 billion over the next 10 years.

Payment by EFT is not mandatory for anyone who was older than 90 years of age before May 1, 2011, or for anyone who is ineligible for a Direct Express® card because the card has been suspended or cancelled. In addition, limited waivers are available to anyone who submits to FMS a written, notarized request for a waiver due to a mental impairment or because they are living in a remote geographic location. How FMS and the SSA implement the waiver process will have a significant impact on affected beneficiaries and agency operations.

In October 2011, after receiving allegations that thieves were redirecting benefit payments away from owners' bank accounts to accounts they controlled, the SSA Inspector General (IG) began conducting several investigations regarding electronic payment fraud, including both direct deposit and reloadable debit cards. In the report, "Direct Deposit Changes Initiated by the Social Security Administration's National 800-Number Staff," the IG found that the SSA's national 800-number service lacks the policies and system checks to prevent wrongful redirection of payments.

In announcing the hearing, Subcommittee Chairman Sam Johnson (R-TX) stated, "Millions of hard working Americans rely on Social Security and deserve the peace of mind that their benefits will arrive safely and on time. We need to determine the flaws in the electronic payment system, protect those who receive their benefits electronically, and make sure that Treasury and Social Security are taking all necessary steps to guard innocent seniors against fraudsters trying to steal their benefits."


The hearing will examine the impact on beneficiaries of electronic payment of Social Security benefits; including exceptions to electronic payment requirements and the effectiveness of efforts to educate beneficiaries about these changes. The hearing will also focus on the degree to which electronic payments are subject to fraud and the actions the SSA and FMS are taking to prevent this fraud.


Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee website and complete the informational forms. From the Committee homepage,, select "Hearings." Select the hearing for which you would like to submit, and click on the link entitled, "Click here to provide a submission for the record." Once you have followed the online instructions, submit all requested information. ATTACH your submission as a Word or WordPerfect document, in compliance with the formatting requirements listed below, by the close of business on Wednesday, September 26, 2012. Finally, please note that due to the change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings. For questions, or if you encounter technical problems, please call (202) 225-1721 or (202) 225-3625.


The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission, but we reserve the right to format it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response to a request for written comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.

1. All submissions and supplementary materials must be provided in Word or WordPerfect format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official hearing record.

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

3. All submissions must include a list of all clients, persons and/or organizations on whose behalf the witness appears. A supplemental sheet must accompany each submission listing the name, company, address, telephone, and fax numbers of each witness.

The Committee seeks to make its facilities accessible to persons with disabilities. If you are in need of special accommodations, please call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four business days' notice is requested). Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.

Note: All Committee advisories and news releases are available on the World Wide Web at

Skip to top

Help us stay free for all your Fellow Americans

Just $5 from everyone reading this would do it.

Thank You!

You are about to be redirected to a secure checkout page.

Please note:

The total order amount will read $0.00 but know that a recurring donation of the amount and frequency that you selected will be processed and initiated tomorrow. You may see a charge of $0.00 on your statement.

Continue to secure page »

Back to top