Farewell to paper checks: Social Security payments will switch to electronic form starting next week.

Transition to Electronic Payments by Social Security Administration

The Social Security Administration (SSA) has decided to discontinue sending paper checks to retirees after 85 years, citing a desire to modernize its services and enhance efficiency.

Beginning on September 30th, nearly 70 million beneficiaries will no longer receive paper checks. Instead, payments will be made through direct deposits or prepaid debit cards.

“Since July 1, we’ve been in direct communication with beneficiaries, working hard to guarantee that less than one percent of those still getting checks can transition to direct deposits or receive a direct express card in time,” a spokesperson mentioned on CBS News.

They further stated, “By switching entirely to electronic payments, we aim to enhance efficiency and security, ensuring beneficiaries get their benefits promptly.”

The SSA argues that electronic payments offer a safer alternative to paper checks. This move is also seen as a cost-saving measure; producing a paper check costs 50 cents, while electronic funds transfers cost only 15 cents.

The agency is notifying those who currently receive paper checks about these changes. They have urged recipients to choose new payment methods ahead of the deadline to guarantee timely benefit delivery.

However, a spokesperson did not provide details on how people were contacted or the current outreach efforts.

Exceptions to Paper Checks

While the agency is phasing out paper checks, there are specific exceptions. They confirmed to CBS News that checks will still be issued to individuals with no alternative way to receive payments, as highlighted after the announcement in July.

In March, President Trump signed an order to push for digital federal payments, emphasizing that paper checks come with risks like unnecessary costs, delays, fraud, and inefficiencies.

Senator Elizabeth Warren and advocates for seniors have expressed concern that around 600,000 individuals who depend on the SSA’s check system cannot take advantage of e-deposits.

This includes those who are “unbanked,” meaning they lack access to traditional banking services. According to a recent report, about 4.6% of the U.S. population falls into this category, often relying on check-cashing services and other alternative payment methods.

The Social Security Act was established in 1935 during President Franklin D. Roosevelt’s administration, and by 1940, the SSA started issuing paper checks to retired workers and their dependents. The very first recipient of a monthly check was a woman named Ida M. Fuller.

Ida, from Vermont, had a background as a teacher and worked as a law secretary. After filing for retirement in 1939, she visited the SSA in Rutland, where she once studied, to inquire about her benefits. She had contributed to the program for about three years at that time.

“I wasn’t expecting anything, but I knew I was paying for something called Social Security, so I wanted to ask the people of Rutland about it,” she recalled.