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16 Jan 2011

U.S. Treasury extends direct deposit to millions of Americans, phasing out paper checks for federal benefit payments

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January 16, 2011 Category: Seniors Posted by:


The U.S. Department of the Treasury issued a rule to extend the safety and convenience of electronic payments to all Americans receiving federal benefit
and non-tax payments.

Anyone applying for benefits on or after May 1, 2011, will receive their payments electronically, while those already receiving paper checks will need to
switch to direct deposit by March 1, 2013.

Electronic payments for all

“Eight in 10 federal benefit recipients already use direct deposit, and now millions of additional retirees, veterans and other Americans will also receive
their money in the safest, most reliable way – electronically,” says Treasury Fiscal Assistant Secretary Richard L. Gregg. “This important change will
provide significant savings to American taxpayers who will no longer incur the annual $120 million price tag associated with paper checks and will save
Social Security $1 billion over the next 10 years.”

All Social Security, Supplemental Security Income, Veterans Affairs, Railroad Retirement Board, Office of Personnel Management benefits and other non-tax
payments will be made electronically. Benefit recipients have the option of direct deposit into a bank or credit union account of their choice or into a
Direct Express® Debit MasterCard ® card account. More than 1.5 million beneficiaries have signed up for the Direct Express® card – a prepaid debit card
product issued by Comerica Bank, the Treasury Department’s financial agent. The Treasury Department introduced the card in 2008.

Timeline for new enrollees

People newly applying for federal benefits on or after May 1, 2011, must choose an electronic payment option at the time they sign up for their benefits.
If they wish to direct their money into a bank or credit union account, they will want to have the following information on hand at the time they apply for
their benefits:

  • Financial institution’s routing transit number (often found on personal check)
  • Account type – checking or saving
  • Account number (often found on personal check)

People who do not have an account at a financial institution or prefer receiving their payments on a prepaid debit card can receive a Direct Express ®
card. For more information, visit

Switching to electronic payments is easy

“I urge everyone receiving a paper Social Security or Supplemental Security Income check to switch to electronic payments now, through the Go Direct
campaign, rather than waiting until the final deadline,” says Michael J. Astrue, Commissioner of Social Security. “Switching now eliminates the risks of
lost and stolen checks, and provides immediate access to your money on payment day.”

Check recipients must switch to electronic payments before the March 1, 2013 deadline. Switching from checks to direct deposit is fast, easy and free at, by calling the U.S. Treasury Processing Center’s toll-free helpline at 1-800-333-1795, or by speaking with their bank or credit union

Anyone already receiving federal benefit payments electronically will continue to receive their money as usual on their payment day. No action is required.

About the Direct Express Debit® MasterCard® card

The Treasury Department recommends the Direct Express card as another safe, convenient alternative to paper checks for benefit payments. Ninety-four
percent of cardholders say they are satisfied with the card, according to a 2010 campaign survey.

Cardholders can make purchases, pay bills and get cash at thousands of locations nationwide. Cardholders have access to at least one free cash withdrawal
with each deposit to the Direct Express card account.* No bank account or credit check is required. The card accounts are FDIC-insured up to the maximum
amount allowed by law. There are no sign-up fees, monthly fees or overdraft charges. Some fees for optional services may apply. Money is immediately
available on payment day.

To sign up for the card, or to learn more about its features and fees, individuals can visit, call 1-800-333-1795 or inquire with their
local Social Security, VA, or other federal benefit agency office.

The preceding information has been provided by the U.S. Department of the Treasury, Financial Management Service. The Go Direct® campaign is sponsored by
the U.S. Department of the Treasury and the Federal Reserve Banks. The Direct Express ® logo, Go Direct® and Direct Express ® are registered service marks,
and the Go Direct (SM) logo is a service mark, of the U.S. Department of the Treasury, Financial Management Service (used with permission). The Direct
Express® Debit MasterCard® card is issued by Comerica Bank, pursuant to a license by MasterCard International Incorporated. MasterCard® and the MasterCard®
Brand Mark are registered trademarks of MasterCard International Incorporated.

*For each federal government deposit to your account, Comerica Bank will waive the fee for one ATM cash withdrawal in the U.S. The fee waiver earned for
that deposit expires on the last day of the following month in which the deposit was credited to the card account.

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