(NEXSTAR) – As autumn approaches in the USA, it marks a pivotal period for federal benefit recipients, especially with Social Security’s cost-of-living adjustments typically unveiled in October. However, prior to these announcements, notable changes in payment methods are on the horizon.
Starting in late September, some recipients of benefits from Social Security and the Department of Veterans Affairs will experience a shift in how they receive their funds. This adjustment is in accordance with an executive order issued in March by former President Donald Trump.
The initiative aims to modernize the nation’s payment systems, noting that traditional methods like paper checks and money orders are significantly more likely to be lost or tampered with—indeed, a staggering 16 times more compared to electronic payments. As a result, most benefits will transition to electronic disbursements, with limited exceptions.
This directive affects “all federal disbursements,” covering a wide range of payments including benefits, vendor transactions, and tax refunds from different government agencies. Acceptable electronic payment methods will encompass direct deposits, prepaid cards, digital wallets, and real-time payment systems. Paper checks will no longer be available starting September 30, with a few specified exceptions.
For those not currently enrolled in electronic payment systems, it’s essential to log into your account to update your Social Security direct deposit information. Alternatively, you can liaise with a representative or your bank, which can assist in relaying your direct deposit details to Social Security. VA benefits can also be updated online or through customer service.
Individuals lacking banking access or online payment options may still qualify for paper payments. Exceptions to the electronic payment requirement may apply, particularly for emergency situations, or if non-electronic payment methods are deemed necessary by the Treasury Secretary.
According to the Social Security Administration, over 99% of beneficiaries already utilize direct deposit. Additionally, the executive order indicates that federal tax payments may also need to transition to electronic methods, complicating traditional payment avenues such as checks or cash for federal obligations, including student loan repayments.