Starting in 2011, new beneficiaries of Social Security, Veterans’ Benefits and Federal Disability payments were required to receive them electronically. Currently 73 million benefit payments are issued each month, with about 90% being electronically distributed.
As this process continues, by March 2013, most everyone will be receiving their electronic payment directly into their bank accounts.
Toe solved the issue of people without bank accounts; a new kind of debit card product is entering the marketplace. It allows the federal payments to be loaded onto it and for the cash to be withdrawn from ATM machines. The cards can usually be used a places that allow payments by debit card also, like retail locations. Usually the process of getting a card avoids normal personal scrutiny associated with a full bank account applications. The cards are branded as the DirectExpress program.
The Social Security website
explains, “Unlike other prepaid debit cards, this card offers cardholders free access to their money. There is no sign-up fee, and no bank account or credit check is required to enroll. Cardholders can make purchases, pay bills and get cash at thousands of ATMs and retail locations.”
Beneficiaries who are age 90 or older won't be required to make the change. Others can apply for a hardship waiver but they will be granted only in "extreme, rare circumstances."
To learn more about the measures, visit the Social Security Administration website.
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.
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