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Tax and Revenue Management

US Treasury seeks e-payment of govt benefits

By Johanna Morden | 26 April 2011

The US Treasury Department will soon begin converting Social Security cheques and federal benefit sums into electronic payment as a cost-saving measure.

Starting May 1, the Treasury Department will distribute social security payments and federal benefits, such as that for veterans and disabled persons, through direct bank deposits or a direct express debit card, the transactions of which can be done online.

The transfer from paper to electronic payment will be fully implemented on May 2013. Rosie Rios, US Treasurer, will be launching the new system next week to prepare for the May 1st turnover.

Through the move to electronic payment, the department expects to reduce government expenses by $1 billion over the next decade.

Currently, over 58 million retirees, surviving family members and disabled people collect Social Security or Supplemental Security benefits.

An estimated eight million more citizens will go into retirement in the next five years.

At present, 11 million US citizens still receive government cheques through mail.

“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,” said Richard L. Gregg, US Treasury Fiscal Assistant Secretary.

“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,” he added.

The Treasury Department also highlights electronic payment as a safer and more convenient mode than paper transactions.

To facilitate the change in payment method, the Treasury Department’s has created the Go Direct public education campaign, where citizens will be educated on the delivery of federal benefit payments and the easy process of switching online through www.GoDirect.org.

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