Soon, government checks won't be in mail

Starting next year, the check will no longer be in the mail for millions of people who receive Social Security and other government benefits.

The federal government, which issues 73 million payments a month, is phasing out paper checks for all benefit programs, requiring people to get payments electronically, either through direct deposit or, mostly for those without a bank account, a debit card.

The changes will affect people who get Social Security, veterans' benefits, railroad pensions and federal disability payments. Tax refunds are exempt, but the Internal Revenue Service encourages taxpayers to get refunds electronically.

About 90 percent of people who receive federal benefits already do so electronically, the Treasury Department says. New beneficiaries were required to get payments electronically starting last year. Now, with a few exceptions, the rest will have to make the switch by March 1, 2013.

"It's just that natural progression of moving to how people are used to receiving their funds," said Walt Henderson, director of the Treasury Department's electronic funds transfer division.

In 2010, more than 540,000 federal benefit checks were reported lost or stolen. Henderson pointed out that electronic payments are safer and more efficient.

The switch will save the government about $120 million a year. Social Security will save $1 billion over the next decade, according to the Treasury Department.

Advocates for seniors say they understand the government's desire to cut costs and take advantage of technologies that most workers already use. But they have raised concerns about requiring the switch for older retirees who may not be used to electronic payments.

"This will affect some very frail elderly people who are living by themselves, many of them, and doing well, but usually within the context of that old paper check that they deposit in the bank," said Web Phillips, a senior policy adviser for the National Committee to Protect Social Security and Medicare.

"The change has to be handled carefully and with a lot of sensitivity so that there aren't people who lose track of a payment or don't understand that they have a card that came in the mail that's the source of their payment," Phillips said.