Federal benefit recipients urged to switch to electronic payments

The Treasury Department is pushing all recipients of federal benefits to go paperless and get their payments electronically by March 1.

An overwhelming majority of recipients of Social Security and other federal benefits have switched to electronic payments, and now the Treasury Department is urging holdouts to do the same before a new law makes the change mandatory.

On March 1, recipients of federal benefits will have to choose between two electronic payment methods -- direct deposit or the Direct Express Debit MasterCard card.

The change is part of the U.S. Treasury Department's effort to phase out paper check payments and require federal benefit recipients to get their money electronically.

According to the Treasury Department, 93 percent of Social Security and Supplemental Security Income payments are now made electronically. Those who fail to switch over will still get paper checks after March 1, but they will receive phone calls urging them to make the change.

Paper statements were discontinued in May 2012 and replaced with online statements, a move that sparked opposition from advocates for older Americans. Web Phillips, a senior policy adviser for the National Committee to Protect Social Security and Medicare, said online statements are not a good replacement.

"The whole purpose of the statement was to make sure everyone got important information about Social Security," Phillips told The Associated Press. Without a paper statement, many Americans won't get the information, he said.

The decision to switch to electronic payments was made in 2010. All new recipients since 2011 have been required to use direct deposit or the Direct Express Card.

Converting the remaining paper checks to electronic payments is expected to save American taxpayers around $1 billion over 10 years. The Treasury Department says that mailing checks costs $4.6 million a month.

Check recipients can sign up for direct deposit or the Direct Express card by calling (800) 333-1795 or visiting www.GoDirect.org.

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