The Social Security Administration (SSA) and the Treasury Department are reminding people to be aware of all the changes that may occur with federal payments and the elimination of all paper checks in the United States. As a result of Donald Trump’s Executive Order there could be delays and, according to Social Security Work, the Federal Reserve and the Coalition of Large Tribes warn that all this modification will also affect people who do not have easy access to the internet. In the same vein, Nextgov and FCW stress that Indian Country will have to address this problem as soon as possible so that it does not affect them.
Federal payments go digital impacting Social Security recipients
According to a March 25th executive order named, “Modernizing Payments To and From America’s Bank Account”, the use of paper based payment systems by the Federal Government will be gradually dispose of out and as of September 30th, 2025, all payments and disbursements will be done by using electronic payment systems.
The executive order states that the use of paper based payments “imposes unnecessary costs; delays; and risks of fraud, lost payments, theft, and inefficiencies.” In addition, “mail theft complaints have increased substantially since the COVID-19 pandemic.” Attempts to modificate all federal payments to a digital mode have been made since 2011.
In the case of Social Security beneficiaries, almost 99% of recipients have already opted to receive their monthly benefits electronically, nevetheless, the unsettle one percent of beneficiaries amounts to around half a million individuals. The order does, even so, state that objections will be done in specific cases, and as such, beneficiaries who want to maintain receiving paper checks will be required to submit a waiver petition to the Treasury Department.
“The policy could cause a flood of people coming to the agency with questions about missing checks, if some of the 521,644 people receiving such paper payments don’t file for a waiver before the end of September,” said one SSA employee, who was not authorized to speak on the record, as per Nextgov/FCW.
In addition, an SSA internal policy document from July 2 does underline that if the waiver if not granted by September 30th or is still pending, then the recipient “may experience a disruption in timely payment delivery.”
How vulnerable groups will receive the change
Several Social Security beneficiaries are older or do not no how to deal with digital banking systems, are unbanked, or may not have access to the internet. According to the Federal Reserve, “six percent of American adults were unbanked in 2023, and that rate is higher among low-income adults, as well as younger people, Black and Hispanic adults, and people with disabilities.”
In addtion, there exists several rural and tribal communities who do not have internet access or are located in a considerable distance from any bank branches and as such, a modification of this size will likely have a important impact on the residents of these communities.
“This transition presents significant challenges for Tribal communities,” the Coalition further noted, referring to the “limited banking infrastructure and inadequate broadband access within Indian Country.”
The president of advocacy group Social Security Works, Nancy Altman underlined to Nextgov/FCW that there are serious implementation questions, especially given all the problems they’re having at SSA. In addition, according to the SSA employee who spoke to Nextgov/FCW, “the push to digital payments could especially slow processing for claims submitted online.”
As such, claims that do not have direct deposit information are being held for 30 days as per the directive given to SSA employees. During this time, the recipient will be contacted via telephone and letter regarding direct deposit requirements. Following this, the benefit will be sent via check if the recipient does not contact the agency.