The season of fall is once again upon us and along with cooler days comes the end of paper check disbursements for recipients of both Social Security benefits, as well as VA benefits. This change is coming about as part of a broader federal initiative aimed at increasing efficiency and security while also cutting down on costs.
Earlier this year in March, an executive order had been issued from the office of the president stipulating that the use of all paper based payments both to and from what is considered “America’s bank account” will be phased out as of September 30th, 2025. This significant shift towards digitization does not come as much of a surprise since there has been ongoing efforts in this regard in the federal space for years now.
However, the good news, for Social Security and VA beneficiaries who still receive their monthly benefits by means of mailed paper check is that exceptions will be made for those who need it once September 30th passes and the executive order comes into full effect. Here is what you need to know.
Goodbye to paper checks in the federal space
First issued on March 25th, the executive order states that the continued used of paper based payments in the federal government “imposes unnecessary costs; delays; and risks of fraud, lost payments, theft, and inefficiencies.” Mail theft is also cited as a reason behind this change because “Department of the Treasury checks are 16 times more likely to be reported lost or stolen, returned undeliverable, or altered than an electronic funds transfer (EFT).”
With regards to cost savings, the order also notes that “maintaining the physical infrastructure and specialized technology for digitizing paper records cost the American taxpayer over $657 million in Fiscal Year 2024 alone.” In the Social Security Administration (SSA)’s July 14th update confirming that the agency will also be partaking in this federal initiative, it notes that “issuing a paper check costs about 50 cents, whereas an EFT costs less than 15 cents. This shift could save the federal government millions of dollars annually.”
This executive order does not solely apply to recipients of Social Security or VA benefits, but is rather set to impact the federal space at large. This means that in addition to all federal payments and disbursements being made digitally, if an individual is owing federal taxes for instance, they will have to make this payment digitally as well.
Confirmed: exceptions will be made
While enhanced security and increased efficiency are plausible reasons for this shift, the general reception of the change could be deemed unpopular — particularly in the case of vulnerable Social Security beneficiaries or VA benefit recipients. There are currently less than one percent of the total Social Security recipients who receive their monthly benefits via mailed check, however this still amounts to at least 500,000 vulnerable individuals.
As such, concerns were raised regarding accessibility for those who are unbanked or underbanked, those who are of an advanced age, or those who do not have access to the internet or electronic banking services. Subsequently, Frank Bisignano, SSA Commissioner, backtracked on the agency’s initial update and confirmed that the SSA will continue to issue paper checks to those who require it.
This confirmation came about following a meeting between Commissioner Bisignano and Senator Elizabeth Warren. The meeting had been held so as to discuss key issues with the SSA such as metrics, staffings, and the July 4th email that had been sent out from the agency regarding the One Big Beautiful Bill Act. With regards to the issue of continued disbursements of paper checks, Sen. Warren’s press release stated the following:
“Commissioner Bisignano committed not to entirely remove the option for beneficiaries to receive paper checks, backtracking on the agency’s own recent announcement to “stop issuing” them. SSA recently announced that it would stop issuing paper checks, which would significantly disrupt services for some of the most vulnerable Americans. In the meeting with Senator Warren, Commissioner Bisignano backtracked, confirming that paper checks will remain an option for beneficiaries who need them.”