By Jen Treacy
Las Vegas Optic
People who receive monthly checks from the federal government are in for a big change beginning this Friday.
In an effort to reduce costs, the U.S. Treasury is switching to a direct- deposit system for people who receive government assistance.
The change affects those receiving Social Security, Veterans Affairs checks, Railroad Retirement and others federal benefits. They have been asked to establish a bank account and register it with the Treasury Department so that their benefits can be deposited directly into their bank accounts.
People who already receive payments electronically will not be affected by this change.
The government estimates that it will save potentially billions of dollars with this change, according to the federal website godirect.org.
Taxpayers currently cover the costs of the paper and postage to mail these checks, but in a paperless system those costs would be eliminated.
If by Mar. 1, no bank account has been set up, recipients will get their payments in the form of one Direct Express debit card that will receive a deposit every month. The Direct Express card has no fees for transactions, or the first withdrawal per deposit, but subsequent withdrawals will cost 90 cents each.
Mary Ann Leberg, a social worker from northern New Mexico, is concerned about how the new law may affect rural New Mexico residents. Gas costs alone will present a significant problem for people who live in sparsely populated communities with limited banking options, she said.
The ATMs may also struggle to handle the cash demands, and banks may discourage people from withdrawing the entire amount, she said. Leberg also worries that people could mistake the Direct Express card for junk mail and discard it because they were expecting a check. She is also worried that use of the Direct Express card is also traceable, which may be unsettling to people who are accustomed to dealing in cash.
Exemptions for the new law apply to individuals born on or before May 1, 1921, individuals who are mentally unable to maintain a bank account and individuals who live more than 50 miles from the nearest bank. People who meet any of these criteria may apply for an exemption by calling the U.S. Treasury at 1-800-333-1795.
The department is open from 6 a.m. to 6 p.m., Mountain Standard Time.
For a shorter wait or hold time, the department recommends that people call as early as possible. The exemption form must be notarized before it is filed, and the Treasury may take up to two months to review it.
To register a bank account or get more information, visit godirect.org.