The Trump administration’s effort to modernize federal payment systems is coming to Social Security, which will start phasing out paper Social Security checks.
The Social Security Administration (SSA) announced in mid-July that it would no longer issue paper checks starting on Sept. 30.
The agency noted in a blog post announcing the move that electronic funds transfers (EFTs) get payments to beneficiaries faster than paper checks, while also providing increased security against fraud and saving the federal government millions of dollars annually – as paper checks cost about 50 cents each to issue while EFTs are less than 15 cents.
While the SSA is looking to transition as many beneficiaries as possible to direct deposit or a prepaid debit card designed for federal benefit payments, known as the Direct Express card, the agency does plan to continue issuing paper checks under some limited circumstances.
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Most Social Security beneficiaries have already transitioned away from paper checks, though the SSA says it’s working to notify those who are receiving paper checks about the upcoming changes and how to prepare.
“Less than one percent of Social Security Administration currently receive paper checks. SSA is proactively contacting those beneficiaries to alert them about the change and the process to enroll in direct deposit or receive Direct Express cards. Where a beneficiary has no other means to receive payment, we will continue to issue paper checks,” a Social Security spokesperson told FOX Business.
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At the time of the agency’s announcement in July, the SSA said that in addition to reaching out to beneficiaries receiving paper checks directly, it will include an insert with all benefit checks that explains how a beneficiary can transition to electronic payments with the assistance of SSA technicians.
SSA’s announcement that paper checks are being phased out also noted the security concerns with mailing checks to beneficiaries.
“Paper checks are 16 times more likely to be lost or stolen compared to electronic payments, increasing the risk of fraud. Electronic payments provide a safer, more secure way to receive benefits,” SSA wrote.
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The electronic payment push is being pursued under an executive order issued by President Donald Trump in March, as well as federal policies that predated the second Trump administration to encourage electronic payments.
SSA noted in its mid-July announcement that beneficiaries may update their payment options at any time online through their personal Social Security account.
The agency also has an informational webpage outlining how beneficiaries can enroll in direct deposit or obtain a Direct Express card.
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