An employee holds a blank U.S. Treasury check before it's run through a er at the U.S.
Treasury ing facility in Philadelphia.Getty ImagesThe government is planning to phase out paper checks for most consumers receiving Social Security benefits and other federal payments this month.The transition is mpted 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 ly 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% ruleThere's still time for 'super catch-up' 401(k) contributions for 2025Fewer people think retirement will 'take a miracle,' report findsThe change may also the federal government millions of dollars per year, according to the Labor Department.
While it costs 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 dered electronically, a portion that increases every year, according to press secretary Pete Kasperowicz.What paper check recipients need to knowBeneficiaries 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 , call the Treasury's electronic payment solution center at 800-967-6857 or 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 statement.The Veterans Administration is required to vide paper checks to the veterans who want them based on federal law, according to Kasperowicz.watch now2:3702:37What you need to know Social Security as the gram turns 90News sThe transition away from paper checks may be "blematic" for some people, particularly if they are less, 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 cess to receive paper checks, Gronniger said.The Treasury Department has outlined several ways individuals may qualify for a waiver, such as if they 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 back, 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 ing a verified government agency phone number or website to verify it is real.