Frequently Asked Questions

1. What changes are being made to how federal benefits are being paid? When will the changes take place?
2. Why is the U.S. Department of the Treasury moving to all-electronic benefit payments?
3. What are electronic payments? What is direct deposit?
4. Is there an option for federal benefit check recipients who don't have a bank account?
5. How do people sign up for or switch to electronic payments of their federal benefits?
6. What happens if people do not sign up for an electronic payment option?
7. What is the Go Direct^® campaign?
8. What is the Direct Express^® Debit MasterCard^® card?
9. How does the Direct Express^® card work?
10. What are the benefits of the Direct Express^® card?
11. How much do I have to pay for the Direct Express^® card?
12. How is the U.S. Department of the Treasury spreading the word about the move to all-electronic benefit payments?
13. How does the Go Direct campaign participate in or support financial literacy efforts?
14. I’m already receiving federal benefit payments electronically to a prepaid debit card or bank account of my choice. With the new rule, what will happen to my payments?

1. What changes are being made to how federal benefits are being paid? When will the changes take place?

The U.S. Department of the Treasury now requires all federal benefit and non-tax payments to be made electronically. (Non-tax payments include federal wage, retirement and vendor payments.) Electronic payments are safer, easier and more reliable than paper checks.

People applying for federal benefit payments must choose an electronic payment option at the time they apply for the benefit. People currently getting federal benefit checks must switch to electronic payments by March 1, 2013. The Treasury Department recommends direct deposit to a bank or credit union account or to a Direct Express^® card account. People who do not choose an electronic payment option by March 1, 2013, or at the time they apply for benefits, will receive their federal benefit payments via the Direct Express^® card, so they will not experience any interruption in payment. People who are already receiving their benefit payments electronically do not need to take action. They will continue to receive their payment as usual on the payment day.

These changes apply to federal benefit payments from the following federal benefit agencies:

• Social Security Administration, including:
  • Social Security and Supplemental Security Income (SSI) payments
• Veterans Affairs (VA)
• Railroad Retirement Board
• Office of Personnel Management
• Department of Labor (Black Lung)
   

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2. Why is the U.S. Department of the Treasury moving to all-electronic benefit payments?

There are many advantages to switching to electronic payments, not only for people who receive federal benefits, but for American taxpayers as well.

• Safer, Easier

  Electronic payments provide a safer, more convenient and cost-effective way for people to get their federal benefits than paper checks. Nine times out of 10, if there's a problem with a Social Security payment, it's with a check, not direct deposit.

• More Convenient

  When people get payments electronically, they don't need to visit a financial institution to cash or deposit a check to gain access to their money. This is particularly important to people who are elderly or disabled, or who lack access to transportation.

  No bank account or credit check is required for the Direct Express^® card. There are no fees to sign up for the card, no monthly fees or overdraft fees. Simply use the card to pay for everyday purchases and avoid the need to cash a check or carry large amounts of cash. Or, if you simply prefer a prepaid debit card, the Direct Express^® card is a safe, no- or low-cost electronic payment option.

• Taxpayer Savings

  This measure also provides significant savings to American taxpayers who will no longer incur the $120 million price tag associated with paper checks – a number that would have ballooned as tens of millions of baby boomers begin to retire.

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3. What are electronic payments? What is direct deposit?

Electronic payments, which allow for the exchange of funds through paperless methods, are safer, easier and more reliable than paper checks. Direct deposit is the electronic transfer of a payment from a company or organization into an individual's checking or savings account. When you get your federal benefit payment electronically, the U.S. Department of the Treasury sends an electronic message to your bank or credit union or Direct Express^® card account crediting your account with the exact amount of your benefit. The difference is, your check isn’t printed or mailed. The government and businesses use direct deposit to transfer millions of dollars every day. Your money is safe with direct deposit. To learn more about direct deposit, you can talk to your local bank or credit union. More information about the Direct Express^® card.

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4. Is there an option for federal benefit check recipients who don't have a bank account?

Yes. The Direct Express^® card is a safe, no- or low-cost electronic alternative. No bank or credit union account or credit check is required to enroll. Cardholders can make purchases, pay bills and get cash. This also is an option for those who prefer a prepaid debit card recommended by the U.S. Department of the Treasury. Many other card services are free, including:

• Purchases at retail locations
• Cash back at retailers at the point of sale
• Optional notification of deposits to your debit card account by phone, email or text message
• Optional low-balance alert when your account balance falls below a certain level
• Balance inquiries at ATMs, by phone or online
• Access to the toll-free customer service number or website 24 hours a day, seven days a week
• One (1) ATM cash withdrawal in the United States for each deposit posted to your account (see Fee Table for details). ATM owner surcharges may apply at ATMs outside the Direct Express^® card surcharge free network (see Fee Tables and surcharge free network for details).

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5. How do people sign up for or switch to electronic payments of their federal benefits?

People applying for federal benefits should be ready to sign up for direct deposit when they apply for federal benefits and understand what information they should have on-hand to sign up. This will ensure they get their benefit payments in the safest, most reliable way possible.

• To get benefit payments by direct deposit into an existing financial institution account, people should be prepared with the following information for a smooth enrollment:
  • Account type: checking or savings
  • Account number
  • Financial institution’s routing number

• To sign up for the Direct Express^® card, people should notify their federal benefit agency at the time of enrollment. Once approved for federal benefits, they will receive their Direct Express^® card and an information packet in the mail.

People who currently receive federal benefits by paper check, should make the switch today to get their money a safer, more reliable way immediately.

If the benefit recipient has a bank or credit union account, he/she should sign up for direct deposit online, or by calling (800) 333-1795, or visiting their local bank/credit union branch or federal benefit agency office.

Those who prefer a prepaid debit card can sign up for the Direct Express^® card by calling toll-free (800) 333-1795, signing up online, or contacting their local federal benefit agency office. No bank account is required to sign up for the card.

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6. What happens if people do not sign up for an electronic payment option?

People who do not choose an electronic payment option by March 1, 2013, or at the time they apply for federal benefits, will receive their payments via the Direct Express^® card so they will not experience any interruption in payment.

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7. What is the Go Direct^® campaign?

The Go Direct campaign launched in 2005 as part of the U.S. Department of the Treasury's and the Federal Reserve Banks' effort to increase the use of electronic payments for federal benefits and to reduce the use of paper checks for federal benefit payments. With the help of organization partners, media and events, the campaign educates Americans by providing the tools and resources they need to enroll in, or transition to, electronic federal benefit payments.

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8. What is the Direct Express^® Debit MasterCard^® card?

The Treasury-recommended Direct Express^® card is a prepaid debit card payment option for federal benefit recipients. Cardholders can make purchases, pay bills and get cash back at thousands of locations nationwide. No bank account or credit check is required to enroll. There are no sign-up fees or monthly account fees. Many other card services are free, including:

• Purchases at retail locations.
• Cash back with purchases.
• Optional notification of deposits to debit card by phone, email or text message.
• Optional low balance alert when account balance falls below a certain level.
• Access to the website 24 hours a day, seven days a week.
• Unlimited balance inquiries at ATMs, by phone or online.
• Access to the toll-free customer service number 24 hours a day, seven days a week.
• Cash withdrawals through bank or credit union tellers.
• One free replacement card per year.
• One free ATM cash withdrawal for each deposit posted to your account each month, provided you use one of the more than 50,000 surcharge-free network ATMs.

See the card fee table for more information.

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9. How does the Direct Express^® card work?

When you sign up to receive your Social Security, Supplemental Security Income, VA  or other federal benefits via the Direct Express^® card, your money will be automatically deposited to your Direct Express^® card account on your payment date. You can use your card to make purchases at stores that accept Debit MasterCard^®, pay bills, purchase money orders for the U.S. Post Office, and get cash from an ATM or financial institution that displays the MasterCard acceptance mark.

For instance, if your benefit is $500 monthly:

• On your payment date, $500 is deposited directly to your card. There is nothing you have to do. There are no fees for depositing the full amount to your card.
• On that same day, you spend $100 at the grocery store using your Direct Express^® card. $100 is automatically deducted from your balance. You now have $400 left on the card. There is no fee charged for using your card to make purchases. Throughout the month, as you make purchases, each purchase amount is deducted from your current balance (in this instance, $400).
• If you get down to $0, your card will be denied for all future purchases until your card is reloaded the next month.
• If you only spend $250 in this month, the remaining $250 will be added to the next month’s $500 deposit. You will now have $750 on the card the next month.

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10. What are the benefits of the Direct Express^® card?

The Direct Express^® card gives you the advantages of direct deposit without requiring a bank account and is an option for those who prefer a prepaid debit card recommended by the Treasury Department:

• Fast and Easy –Your money goes straight into the Direct Express^® card account on payment day each month. There’s no need to wait for the mail to arrive or to make a special trip to cash a check.
• Safe – There’s no risk of lost or stolen checks, no need to carry large amounts of cash, and your money is insured by the Federal Deposit Insurance Corporation (FDIC) up to the maximum allowed by law.
• Convenient – Use your card to make everyday purchases everywhere Debit MasterCard is accepted. You can make purchases, pay bills, buy money orders and get cash at thousands of locations nationwide. You can use your card 24 hours a day, seven days a week.

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11. How much do I have to pay for the Direct Express^® card?

Most services are free. There is no cost to sign up for the card and there are no monthly fees or overdraft fees. While there are fees for a limited number of optional transactions, it is possible to use the card for free.

Free services include:

• Purchases at retail locations. 
• Cash back with purchases.
• Optional notification of deposits to debit card by phone, email or text message.
• Optional low balance alert when account balance falls below a certain level.
• Access to the website 24 hours a day, seven days a week.
• Unlimited balance inquiries at ATMs, by phone or online.
• Access to the toll-free customer service number 24 hours a day, seven days a week.
• Cash withdrawals through bank or credit union tellers.
• One free replacement card per year.
• One free ATM cash withdrawal for each deposit posted to your account each month, provided you use one of the more than 50,000 surcharge-free network ATMs.

Optional services available for a fee include

• More than one ATM withdrawal per deposit ($0.90 per withdrawal).
• ATM owner fees called "surcharge fees" may apply if you do not use one of the more than 50,000 surcharge-free network ATMs.
• Monthly paper statement mailed to you ($0.75 per month).
• Transfer of money from your card account to a personal United States bank account ($1.50).
• Card replacement after one free replacement card per year ($4.00 per card). If you request expedited delivery, you will be charged an additional $13.50. There is no additional charge for standard delivery.
• Purchases at merchant locations or ATM cash withdrawals outside of the United States.

Direct Express^® card fee schedule

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12. How is the Treasury Department spreading the word about the move to all-electronic benefit payments?

The Treasury Department is fully committed to helping Americans be prepared for and make the transition to the electronic payment of federal benefits. The Treasury Department has launched the Go Direct campaign as a public education campaign to communicate with Americans about the new electronic payments requirement. The campaign will do so with the help of nearly 1,800 partner organizations, as well as through events, media coverage, print materials and the Internet. Campaign materials and websites in English and Spanish also are available at www.GoDirect.org and www.DirectoASuCuenta.org.

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13. How does the Go Direct campaign participate in or support financial literacy efforts?

The Go Direct campaign has been involved with many of the most significant financial literacy efforts currently in force in across the country, including:

• The Bank On Program
• FDIC Alliance for Economic Inclusion
• FDIC Money Smart Curriculum
• Money Smart Week

In addition, during the campaign’s long tenure it has developed relationships with local financial literacy coalition leaders, positioning the Go Direct campaign as a dependable community financial education resource in communities around the country.

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14. I’m already receiving federal benefit payments electronically to a prepaid debit card or bank account of my choice. With the new rule, what will happen to my payments?

If you are already receiving your federal benefit payments electronically, this change will not affect you.

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