Governments Benefits Direct Deposited in 2011

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Social SecurityToday, the Obama administration will announce that all benefits payments from the government will be paid electronically, rather than with paper checks. This includes, but is not limited to, Social Security, unemployment, veterans benefits, railroad retirement, and other government benefits. If you do not have a bank account, you will instead receive a debit card through the Treasury Department’s Direct Express Debit MasterCard program.

This is a good thing and a long time coming. With electronic deposits, you get your money faster and taxpayers save money. Currently, 85% of benefit recipients are already getting their benefits direct deposited into their bank accounts. It’s estimated that this will save $303 million over the first five years and then $120 million each year thereafter. It’s estimated that it costs $1 to mail a check and only 10 cents to direct dpeosit it.

If you enroll for benefits on or after March 1st, 2011, you are required to receive them by direct deposit or debit card. Existing beneficiaries have until March 2013 to supply direct deposit information or request a debit card. The debit card has no monthly fees, no required credit check, and signup is free.

(Photo: swanksalot)

{ 20 comments, please add your thoughts now! }

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20 Responses to “Governments Benefits Direct Deposited in 2011”

  1. zapeta says:

    No kidding, about time. I’m glad to see the debit card has no fees. People who have been using check cashing places will probably end up with a few more bucks each month having the debit card.

  2. It really is long overdue. The cost of sending out all of those checks is just ridiculous.

  3. cubiclegeoff says:

    Glad they’re finally doing this, although I’m sure there will be a group of people that will protest (mainly those that like to receive a check in the mail and hold it).

  4. billsnider says:

    How long will it take for someone to file a lawsuit?

    Bill Snider

  5. Yana says:

    I’m a little uncomfortable with the idea of giving the government my bank information, but since I like having multiple financial institutions, it’s a reason not to close the one I really don’t like and fund minimally. On top of that, my primary bank won’t be privy to certain of my financial info, if I have occasion to use this Direct Deposit of anything. Different financial institutions for different purposes 🙂

    • The IRS already knows your bank information.

      As does everyone you’ve ever written a check to.

      • Yana says:

        Yeah, I know that, Ryan – but I’m not quite paranoid enough to think they’ve logged the bank info from receiving a check. For Direct Deposit, they have to keep it on record.

        As far as the cost savings, I think this is a good idea.

        • The government most definitely keeps everything on record.

          Whether or not they can actually locate it, of course, is another matter… 😉 (My experience as a census worker.)

          Note: My statements do not reflect those of my employer.

  6. This just makes too much sense. I can’t believe that they didn’t do this sooner, but I’m sure there will be plenty of people complaining about it.

  7. ebekele says:

    it’s about time…

  8. javi says:

    Finally the government is thinking. Less of a chance for theft of checks and the governemt saves money for sending them.

  9. I agree that all benefits payments from the government now being paid electronically (rather than with paper checks) is a good thing. Even if you don’t have an account, you will receive a debit card account. This electronic payment method is more efficient and saves on paper which is “going green”. This actually saves money too which is what I am all about as the ConsumerMiser. Electronic payments used to scare people, but now I think most people are comfortable with it now.

  10. CreditShout says:

    I agree that this was long overdue. Thanks for posting and keeping us up to date.

  11. eric says:

    Well it’s a step in the right direction. Cost saving with technology!

  12. This is a good thing. My Social Security is direct-deposited, but I had to proactively ask them to do it and it took some time and hassle. Also it took added hassle to ask them to withhold income taxes!

    Debit cards are really a pain in the tuchus, and risky, since they’re easy to lose and easy to steal. But I guess if you’re so poor you don’t have a bank account, you don’t have much choice, eh?

  13. FlyFisher says:

    Cost Saving!!! This is a huge need with our massive government spending… Crazy to think the government is so long overdue on something that saves $100M+ each year.

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