Social Security Ends Paper Checks

Here is why your Social Security check isn’t in the mail.

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Baby boomers who sign up for Social Security benefits on or after May 1, 2011 will no longer have the option of receiving a paper check in the mail. Individuals newly applying for Social Security or other federal benefits will need to choose an electronic payment method beginning next week. Retirees already receiving their payments by paper check have until March 1, 2013 to switch to direct deposit.

[See 4 Social Security Changes Coming in 2011.]

Retirees can choose to have their Social Security payments directly deposited into a bank or credit union account or have the money loaded onto a prepaid debit card. “If you have a bank account, the best choice is direct deposit,” says Richard Gregg, fiscal assistant secretary of the Treasury. “For individuals who don’t have a bank account, the Direct Express card is very easy to use.”

Most federal benefit recipients already receive their payments by direct deposit. Approximately 80 percent of beneficiaries receive their Social Security or other federal benefit payments electronically. To sign up for direct deposit you will need to provide your financial institution’s routing transit number and account number, which can both typically be found on the bottom of a personal check.

[See 7 Things You Need to Know About the Social Security Debit Card.]

People who do not choose an electronic payment option at the time they apply for federal benefits or by March 1, 2013 will receive their payments via a Direct Express Debit MasterCard. Approximately 1.5 million people have signed up for these prepaid debit cards since they became available in 2008. As with a bank account, you will need to learn what actions will cause you to be changed fees. For example, purchases at retail locations, cash back with purchases, and one withdrawal per month at an in-network ATM are free services. But if you want to make more than one ATM withdrawal per month at an in-network ATM it will cost you 90 cents per withdrawal. And receiving a paper statement in the mail costs 75 cents per month. “The fees that are there are laid out very clearly,” says Gregg. “If you use it wisely at retail establishments or grocery stores, you can actually use it without a monthly fee.”

Eliminating the printing and postage costs of paper checks is expected to save the federal government and the Social Security trust fund $125 million per year. “It costs 92 cents more to issue a payment by paper check than by direct deposit,” says U.S. Treasurer Rosie Rios. “We are retiring the Social Security paper check option in favor of electronic payments because it is the right thing to do for benefit recipients and American taxpayers alike.” Electronic payments allow seniors to get their money faster and reduce the number of lost or stolen payments. Last year more than 540,000 Social Security and Supplemental Security Income paper checks were reported lost or stolen and had to be replaced.

[See 10 Ways to Boost Your Social Security Checks.]

The Treasury Department published the rule change eliminating paper checks in December 2010. The switch was initially scheduled to occur on March 1, but was then delayed until May 1. Individuals already receiving federal benefit payments electronically will continue to receive their money on the usual payment day. Beneficiaries getting paper checks will receive notices in their mailings encouraging them to switch to electronic payments.

Earlier this month the Social Security Administration suspended annual paper statements and launched a series of Star Trek-themed public service announcements starring Patty Duke and George Takei encouraging baby boomers to claim Social Security benefits online. You can also sign up for direct deposit at, by calling the U.S. Treasury Electronic Payment Solution Center at (800) 333-1795, or by speaking with a bank or credit union representative.

Twitter: @aiming2retire