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Benefits payment change on horizon

Profile image for By Karina Ramírez / Staff Writer
By Karina Ramírez / Staff Writer

Government requires recipients to sign up for electronic deposit

In four days, people will see a change in how they receive their Social Security, unemployment benefits and other federal payments.

The U.S. Department of the Treasury is requiring benefit recipients to sign up for an electronic payment option by March 1. Benefit recipients can choose to sign up for direct deposit or use a Direct Express debit card option.

The switch from checks to electronic payment applies to those receiving Social Security and Supplemental Security Income, Veterans Affairs, Railroad Retirement Board, Office of Personnel Management and Department of Labor (Black Lung) payments, according to the Treasury’s Go Direct, a campaign dedicated to informing the public about the electronic payment change.

Dennis Simmons, president of SWACHA, an electronic payment association serving Texas, New Mexico and Louisiana, clarified that benefit recipients will not stop receiving payments from the federal government by the deadline, but will be “gently persuaded to do so.”

“People need to understand that no one is going to stop getting their checks and they are not going to suspend their payment,” he said. “But it is the law.”

In April 2011, the Treasury announced it would be retiring paper checks for benefit holders and that people had to switch by March 1, 2013, to an electronic payment option, according to a news release.

The Financial Management Service, a bureau of the Treasury, has been actively working with financial institutions to inform them of the change, Simmons said. If people have not signed up by the deadline, they will get phone calls and letters from their respective agencies, he said.

“It saves the taxpayer a dollar and a quarter to send an ACH transaction,” he said. “This is good for the beneficiary and the taxpayer.”

Jo Marie Feike, customer service manager with First United Bank in Denton and Krum, said her bank has known about the switch for about a year.

“We sent fliers to all of our customers and we had several people sign up because they know about this [change],” she said.

Feike said most of her banks’ customers are already using direct deposit, but there was a push since last year to get the non-direct deposit users to sign up. About 10 people have signed up in the last month at her banks because they know of the change, she said.

“And we are still reminding them because of the deadline,” Feike said.

The federal government has been promoting the Go Direct campaign to encourage benefit recipients to sign up for electronic payment options. By having people sign up for the option, the federal government estimates it will save about $120 million, according to its website.

Danny Mitchell, president of the First Security Bank branch on Oak Street, said he had seen his senior clients stop by and open accounts in the last couple of days.

“Most of them do sign up for direct deposit,” he said. “But no one has mentioned that [program] in particular.”

The Treasury began its Go Direct campaign in 2005 as a way to increase the use of electronic payments for federal benefits and reduce the use of paper checks.

As of January, 93 percent of Texans who get federal benefits had signed up to receive the electronic payments. Still 300,000 federal benefit checks were sent that month, SWACHA reported.

KARINA RAMÍREZ can be reached at 940-566-6878. Her e-mail address is .


Go Direct