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Nearly 40,000 Utahns can save the Social Security system a quick $400,000 a year and save themselves some money in the process.
The U.S. Treasury is introducing debit cards for senior citizens and others who don't have bank accounts and instead cash their checks.
"People getting paper checks are in a very vulnerable place," said Alvina McHale with the Financial Management Service of the Treasury.
Aside from the fact that carrying wads of cash can bring its own challenges, people who receive paper checks also face unexpected disruptions. McHale cites Hurricane Gustav as an example. While the Treasury tried to get checks out early, it wasn't enough.
"The evacuations got ahead of us," she said. "People were waiting around in New Orleans waiting for their checks."
The debit cards are being issued by Dallas-based Comerica Bank, which won a bid last fall. The cards carry the MasterCard logo and can be used anywhere it is accepted. While there could be ATM fees if used outside a specified network, McHale said cash can be drawn at the time of purchase or nearly any bank that accepts MasterCard.
Those without a bank account could also save a few dollars using the debit card. Cashing a check comes with an average fee of $6 but can often go as high as $20 or $25. That's not an insignificant amount for someone on a fixed income, McHale said.
The debit card account doesn't act as a regular account. Only funds from Social Security can go into it. Information on how to join will be coming in the mail with checks during the month of September.
If everyone receiving a paper check switched over to the card, McHale said Utah could save the Social Security fund $382,000 a year.
"That's not an unsubstantial amount of money."
By the numbers:
• Nearly 2 million Social Security and Supplemental Security recipients in a dozen Western states will receive information about the new Direct Express card with their monthly checks in September.
• About 4 million Social Security and SSI recipients nationally (approximately 600,000 in the Western states) do not have bank accounts and, until now, have had to rely on paper check payments.
• About 10.3 million senior citizens, people with disabilities and others still rely on paper checks for their Social Security and SSI payments. More than 36,000 checks are sent to Utah residents each month.
• Last year, 700,000 Social Security and SSI paper checks were reported lost or stolen and the payments had to be reissued.
-- Source: U.S. Treasury
• For more information: Call 1-877-212-9991 or visit www.USDirectExpress.com |
