In its pilot program, the Social Security Administration (SSA) started distributing Social Security Disability Insurance (SSDI) benefits via electronic delivery to new recipients in 2011. The U.S. Treasury Department’s goal is to phase out all paper checks for this service.
By the target date of March 1, 2013, all of the Social Security beneficiaries will have been converted over to receiving their payments electronically.
Recipients must choose either:
Direct deposit into a bank account (or credit union), or
Receiving their payments on a payment card or debit card
People currently receiving benefits can change over to the new system before March 1, 2013 by visiting their bank now and making the proper arrangements.
By delivering benefits electronically, the Social Security Administration is estimating over $1 billion in cost savings over the next ten years.
The SSDI is a federally mandated disability insurance program that is run by the Social Security Administration. It acts separately from the retirement and Supplemental Security Income programs. SSDI issues monthly benefits to people who are under full retirement age (age 65 or older) and who can no longer work because of a sever disability that is expected to continue to affect the individual for more than a year (of if the disability is terminal.) The program is funded through FICA taxes.
To be eligible for the SSDI benefits an individual must:
  • Be insured via working and paying payroll taxes for five of the least 10 years. 
  • Must have been disabled before reaching Social Security retirement age.
  • Meet the Social Security Administration’s definition of disability. This usually means suffering from a severe mental or physical impairment that keeps an individual from working for 12 months or longer, or if it terminal.
Modern Business Associates is an HR company that focuses on payroll and HR outsourcing. We routinely work with clients on benefits and HR management. As a Professional Payroll and HR outsource organization, our clients rely on us to help them effectively deal with these kinds of topics.