Federal Benefit Payments Going All-Electronic

HR professionals can help spread the word

By SHRM Online staff Feb 14, 2011
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The U.S. Treasury Department is requiring that individuals applying for Social Security, veterans benefits or other federal benefits on or after May 1, 2011, will receive electronic payments. Those currently receiving federal benefit checks will need to switch to an electronic payment option by March 1, 2013.

A statement issued by the Treasury Department explained that:

  • Those who do not choose an electronic payment option at the time they apply for federal benefits, or who do not switch by the deadline, will receive their benefit payments via a Direct Express Debit MasterCardaccount, in order to avoid any interruption in payment.
  • Those who are already receiving benefit payments electronically do not need to take action. They will continue to receive their payment as usual on the payment day.

According to the Treasury, having federal benefits paid electronically by direct deposit into the bank or credit union account of one’s choice or into a Direct Express card account is safer, faster and more reliable than receiving paper benefit checks.In 2010, more than 540,000 Treasury-issued checks were reported lost or stolen, and had to be reissued, according to the department.

With direct deposit, the Treasury sends an electronic message to the recipient’s bank or credit union account on the usual payment day with the exact amount of the benefit payment from Social Security, Veterans Affairs or other federal agency. "Recipients don’t have to worry about their money being stolen out of their mailbox and there’s no need to make a trip to cash or deposit a check. Plus, it’s better for the environment and saves taxpayer dollars," according to a Treasury statement.

HR Can Help

HR professionals can use the Treasury's Go Direct campaign to inform employees—especially those on the verge of retiring—about this change by following these steps:

  • Display Go Direct campaign andDirect Express card materials in the organization's office or lobby.
  • Link to www.GoDirect.org from the organization's website or employee intranet site.
  • Help employees who are about to apply for federal benefits be ready to choose direct deposit or the Direct Express card, and to understand what information they should have on-hand when signing up.
  • Actively encourage employees who currently receive federal benefit checks to make the switch to electronic payments before the deadline.

"SHRM encourages our members to visit the Partners section of the Go Direct website, or to call a campaign representative at (952) 346-6055 for more information," said SHRM Chief Global Membership Officer Janet N. Parker, SPHR, GPHR. "HR professionals should get involved by sharing information about this new federal rule and helping to sign people up for direct deposit or the Direct Express card," she advised.

Related Articles:

Living with Earnings Limitsfor Government Benefits, HR Magazine, June 2010

DirectDeposit Can Help Save Money, the Environment, HR News, September 2009

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