An employee holds a blank U.S. Treasury check before it’s run through a printer at the U.S. Treasury printing facility in Philadelphia.
Getty Images
The government is planning to phase out paper checks for most consumers receiving Social Security benefits and other federal payments this month.
The transition is prompted by an executive order signed by President Donald Trump in March, which mandates the move to electronic payments for federal benefits by Sept. 30.
The move is aimed at preventing fraud and reducing spending, according to the Trump administration.
Treasury checks are more likely to be stolen, lost or returned compared to electronic funds transfers, according to the executive order.
More from Personal Finance:
Inflation is retirees’ ‘greatest enemy,’ says inventor of 4% rule
There’s still time for ‘super catch-up’ 401(k) contributions for 2025
Fewer people think retirement will ‘take a miracle,’ report finds
The change may also save the federal government millions of dollars per year, according to the Labor Department. While it costs about 50 cents to issue a paper check, an electronic funds transfer costs less than 15 cents, according to the agency.
Most beneficiaries already receive their payments electronically, according to the Social Security Administration and Department of Veterans Affairs. Fewer than 1% of Social Security beneficiaries receive paper checks, according to a Social Security spokesperson. More than 97% of Veterans Administration benefit payments are delivered electronically, a portion that increases every year, according to press secretary Pete Kasperowicz.
What paper check recipients need to know
Beneficiaries who already receive electronic payments do not need to take action.
Those who are still receiving paper checks can enroll in direct deposit by calling the federal agency responsible for their payments, enrolling online at GoDirect.gov, or calling the electronic payment solution center at 800-967-6857, according to the Treasury Department.
Beneficiaries who do not have a bank account for direct deposit can open one at FDIC: GetBanked or MyCreditUnion.gov.
Alternatively, they may choose to receive monthly benefit payments electronically through a Treasury-sponsored debit card. To sign up, call the Treasury’s electronic payment solution center at 800-967-6857 or contact the agency responsible for the payments.
Some beneficiaries may still receive paper checks after the phaseout date.
“Where a beneficiary has no other means to receive payment, we will continue to issue paper checks,” a Social Security spokesperson said in an email statement.
The Veterans Administration is required to provide paper checks to the veterans who want them based on federal law, according to Kasperowicz.
The transition away from paper checks may be “problematic” for some people, particularly if they are homeless, disabled, unbanked or just don’t feel comfortable receiving an electronic payment, said Tracey Gronniger, managing director of economic security at Justice in Aging, a national organization focused on fighting senior poverty.
Moreover, beneficiaries may face complications with their payments if they have to go through a waiver process to receive paper checks, Gronniger said.
The Treasury Department has outlined several ways individuals may qualify for a waiver, such as if they live in a remote location without infrastructure to support electronic payments, are age 90 or older or have a mental impairment. The agency is working on reviewing and updating its guidance on waivers based on feedback, according to Treasury officials.
Beneficiaries who are new to electronic payments may be more susceptible to phishing and other types of scams, Gronniger said.
Before responding to any request, the Treasury Department recommends contacting a verified government agency phone number or website to verify it is real.