Get Ready for Required Direct Deposit of Federal Benefit Payments

Like it or not, retirees receiving Social Security and other beneficiaries of federal benefit plans are required to begin receiving payments electronically by March 1, 2013, if they aren’t already doing so. Under the government’s “Go Direct” program, you can choose between having a direct deposit made to a bank or credit union account and transferring the amount to a Direct Express® Debit MasterCard® card. It’s the law.

Those who haven’t chosen an electronic payment option for Social Security and other benefit checks by March 1, 2013, will be out of compliance with the law. In that case, the money will be put on the Direct Express® card. If you’re already receiving benefit payments electronically, you don’t have to do anything. You’ll continue to receive your payment as usual.

Why Is Uncle Sam Making the Change?

Electronic payments are considered a safer, more convenient and cost-effective way for people to receive their federal benefits. You don’t have to go to a bank or other financial institution to cash in or deposit the check. This can be beneficial to elderly and disabled people or others who don’t have access to transportation. And you can’t dismiss the savings to Uncle Sam: The government figures it will avoid a $120 million price tag by ending the printing and mailing of paper checks.

When you arrange to receive your federal benefit payment electronically, the U.S. Treasury Department sends an electronic message to your bank or credit union or Direct Express® card account crediting your account with the exact amount of the benefit. There’s no printing or mailing of checks. It’s the same basic direct deposit system that businesses around the country use to transfer millions of dollars every day.

No bank account or credit check is required for the Direct Express® card. Nor do you have to pay fees for signing up for the card, monthly fees or overdraft fees. Simply use the card to pay for ordinary purchases. Alternatively, if you prefer to use a prepaid debit card, the Direct Express® card is a safe, low- or no-cost electronic payment option.

Despite the perceived advantages, some recipients — especially older people suspicious of technology or uncomfortable with it — may be opposed to the change. The Treasury Department has said that it will grant exceptions only in rare circumstances. But automatic waivers are granted to individuals born on or before May 1, 1921 so most people in their nineties are exempt from the new requirement. Recipients who live in remote areas without sufficient banking infrastructure may apply for a waiver as well as recipients for whom electronic payments would impose a hardship due to a mental impairment. Waiver applications can be requested by calling 800-333-1795.

If you’re applying for federal benefits, be prepared to sign up for direct deposit. To ensure a smooth enrollment, you should have the following information ready:

  • Social Security number or claim number;
  • The 12-digit federal benefit check number;
  • The account type (such as checking or savings);
  • The account number; and
  • The financial institution’s routing number.

To sign up for the Direct Express®card, all you have to do is notify the federal benefit agency at the time of enrollment. Once you’re approved for federal benefits, you will receive their Direct Express® card and an information packet in the mail.

If you are caring for someone who currently receives federal benefit payments on paper checks, or if you receive a paper check on behalf of someone else, the Treasury Department is also requiring you to have these payments switched to an electronic option by March 1, 2013. A representative payee can sign up for direct deposit or the Direct Express® card by calling the U.S. Treasury Electronic Payment Solution Center at 800-333-1795, Monday through Friday from 8 a.m. to 8 p.m. ET. For direct deposit, you can also switch to the online method at or at your bank or credit union.

Note: If a person born before May 1, 1921 has a representative payee, that person’s benefit still must be converted to electronic payment by the March 1 deadline. In other words, the automatic exception granted to individuals born on or before May 1, 1921 doesn’t apply to recipients with a representative payee.

What Payments Do the New Rules Cover?

The requirement to begin receiving payments electronically applies to payments from the following federal benefit agencies:

  • Social Security Administration, including Social Security and Supplemental Security Income (SSI) payments;
  • Veterans Affairs (VA);
  • Railroad Retirement Board;
  • Office of Personnel Management; and
  • Department of Labor (Black Lung).

Do you still have questions about the new requirements? To learn more about the Go Direct program, visit or ask at your bank or credit union.