Social Security backs off major change set for September

The Social Security Administration is backing off a plan that would have eliminated paper checks for benefit payments.

The agency had previously announced it would discontinue paper checks starting Sept. 30 as “part of a broader government-wide initiative to modernize payment systems an enhance service delivery.” The agency’s goal, it said, was to switch all recipients to electronic payments via direct deposit or pre-paid cards.

However, the agency is now seemingly reversing its hard line, stating that it will continue to issue some paper checks, even as it stresses the advantages of digital payments.

SSA told CBS MoneyWatch it is not ending paper checks for beneficiaries, including those who receive traditional retirement benefits and Supplemental Security Income, if they have no other way to receive payments.

Senator Elizabeth Warren, D-Massachusetts, shared the change in a recent press call stated that fewerafter a meeting with SSA Commissioner Frank Bisignano.

“There are about 600,000 Americans who still receive their paper checks — it’s a small fraction of people who receive Social Security payments, but it’s a population that often needs checks through paper,” Warner said, adding SSA “made a commitment that no one will be left behind and that people who have access to paper checks will get access to paper checks.”

The agency previously stated that fewer than 1% of beneficiaries receive paper checks. The main benefit of changing is cost – issuing a paper check costs about 50 cents compared to 15 cents for an Electronic Fund Transfer.

Paper checks are also 16 times more likely to be lost or stolen, SSA said.

If you purchase a product or register for an account through a link on our site, we may receive compensation. By using this site, you consent to our User Agreement and agree that your clicks, interactions, and personal information may be collected, recorded, and/or stored by us and social media and other third-party partners in accordance with our Privacy Policy.