Starting My 1st anyone who applies can’t get checks anymore and there is a conversion time until March of 2013 to move everyone over to direct deposit.  If you don’t have a checking account, there’s a prepaid debit card you can get instead.  This new rule also requires bank to protect funds from creditors and some were co-mingled with other accounts, so it sounds like the best way to go is to keep one account for social security only if depositing funds from other areas or go get the debit card that is prepaid.  California is doing the same thing with unemployment benefits. 

California Following the Direction of Social Security With Putting Disability Payment Benefits On Debit Cards Starting in March, Unemployment to Follow in June

We don’t have these same options with Medicare as it was the IT infrastructure the the government was never allowed to build and thus it costs more money to run with current outsourced agreements with insurers who do the IT work with claims.

Medicare–The Missing IT Infrastructure the US Government Never Got The Chance to Build And A Few Other Housekeeping Issues…

By doing so we run into situations like this:

Insurers Made $450 Million with Interest Income by Holding Medicare Funds for Around 46 Days Before Releasing Payment

After the paper is gone everything with Social Security will have a data trail so there’s a bank involved somewhere along the line.  Social security states in 10 years this conversion will save a billion in expenses versus mailing checks.   Social security also works with electronic medical records and has some pilot programs in place for exchanging information for disability claims. 

Social Security Awards Contracts for Electronic Medical Records – 15 New Recipients for Disability Claim Info

Who says COBOL doesn’t rock <grin>.  BD 

Starting May 1, everyone who applies for Social Security or other federal government benefits will be required to arrange for direct deposit of their payments. The government plans to phase out paper checks entirely by 2013.

Now, about 85% of Social Security beneficiaries get payments through direct deposit, says Treasury assistant secretary Richard Gregg. But the government issues more than 120 million checks a year, at a cost of about $1 each, vs. 10 cents for an electronic payment, Gregg says. Treasury estimates that eliminating paper checks will save the government about $1 billion over 10 years.

Benefits that are delivered electronically are more difficult to protect from creditors. In general, banks are prohibited from freezing or garnishing accounts that contain Social Security or veterans' benefits. However, in the past, individuals could lose that protection if their benefits were commingled with other funds in their accounts.

Some seniors avoided this problem by receiving paper checks and keeping them out of their bank accounts. Seniors who sign up for benefits after April 30 won't have that option.

Under rules that take effect May 1, though, banks will be required to determine the amount of federal payments deposited in a customer's account and protect that money from creditors.

Social Security begins phase-out of paper checks -


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