Along with the progression of the month of September, the final countdown for the start date of an executive order is also in progression. Most, if not all, Social Security beneficiaries will likely already be aware of the upcoming transition to electronic payments that is due to go into full effect as of September 30th. This change from the Social Security Administration (SSA) is being made in accordance with the broader federal initiative to modernize all payments made to and from what is considered as America’s bank account.
The executive order was first issued by the White House on March 25th, stipulating that all payments made to and from the federal government are to be made electronically as of September 30th. The SSA later posted an update on its blog on July 14th confirming that the agency also plans to discontinue the disbursement of paper checks to its beneficiaries.
As such, the agency is currently encouraging all beneficiaries who still receive paper checks to update their payment information to one of the two available electronic payment methods. Here is everything you need to know about this transition and what steps to take to update your payment method.
Executive order to modernize payments
The decision to digitize all payments in the federal space has long been coming down the pipeline and now a concrete date has finally been set for it. According to the executive order titled “Modernizing Payments To and From America’s Bank Account”, the use of paper based payments such as mailed checks or money orders “imposes unnecessary costs; delays; and risks of fraud, lost payments, theft, and inefficiencies.”
Whilst electronic banking comes with its own set of risks, they do appear to be far more minimal than the risks associated with a mailed paper check. The executive order also notes that, “historically, 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).”
The most notable driving force behind this transition would have to be the cost savings. In its update, the SSA writes 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,” citing the U.S. Department of the Treasury. Additionally, “maintaining the physical infrastructure and specialized technology for digitizing paper records cost the American taxpayer over $657 million in Fiscal Year 2024 alone,” as per the executive order.
How to change your payment method
The SSA has stated that it is “proactively sending notices to people who currently receive paper checks, to explain the upcoming change and highlight the benefits of switching to electronic payments,” and “all benefit checks will include an insert explaining the steps a beneficiary can take to transition to electronic payments, and our technicians are ready to assist.”
The SSA currently has two electronic payment options available to beneficiaries: Direct Deposit or Direct Express Card. The simplest option for beneficiaries who wish to switch payment methods is to update their payment information online through their my Social Security account. There are alternate methods available to update your payment method as well. These are listed below:
- Enroll online at GoDirect.gov
- Call in to your local SSA field office and follow their instructions to enroll in a direct deposit
- Call in to the Electronic Payment Solution Center at 1-800-967-6857, Monday – Friday 9 a.m.-7 p.m. ET (8 a.m.-6 p.m. CT)
Additionally, for beneficiaries who do not have a bank account, you can sign up for a Direct Express card. This is a debit card designed specifically for federal benefit payments. Alternatively, you could also open an account at FDIC: GetBanked or MyCreditUnion.gov if you do not have a bank account through which you can receive direct deposits.