Social Security Going High-Tech
In June, the U.S. Treasury Department announced that it would start using debit cards for recipients of Social Security and Supplemental Security Income (SSI) benefits who still receive an actual paper check once a month. Building on its successful campaign to switch federal benefit recipients to direct deposit, the new Direct Express debit cards aim to help recipients who do not have bank accounts.
The Treasury Department estimates that four million Social Security and SSI check recipients do not have bank accounts, placing them at greater risk of check delivery delays due to poor weather, national or local emergencies, and other check related problems, such as lost or stolen checks. According to the Treasury Department, nine times out of 10, problems with Social Security payments are linked to paper checks, not direct deposit.
Each month, payments will be automatically deposited on the Direct Express card account on the recipient's designated payment day. Card holders will be able to access their money at ATMs and financial institutions nationwide. They will be able to use their card to get cash back and make purchases at retail locations, as well as pay bills and make purchases online. In addition, these accounts are PIN-protected, FDIC-insured, and subject to federal consumer protection regulations (Regulation E).
Switching to electronic payments could save the federal government as much as $42 million a year.
Submitted by Heather Morton
Excerpted from:
http://www.ncsl.org/standcomm/sccomfc/summer08.htm
