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.

The Social Security Administration 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.

U.S. Sen. Elizabeth Warren, D-Mass., shared the change in a recent press call after a meeting with Social Security 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 that the Social Security Administration “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 funds transfer.

Paper checks are also 16 times more likely to be lost or stolen, the Social Security Administration said.

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