NASHVILLE, Tenn. – Fewer senior citizens are taking the government up on its offer to deposit their Social Security checks directly into their bank accounts, costing taxpayers millions.
Ninety percent of new Social Security recipients signed up for direct deposit in the late ’90s, but that number has fallen off to 68 percent, a recent federal study found.
It costs 68 cents to produce and mail each Social Security check, and the government sends out 13 million checks each month. That amounts to about $100 million each year.
The government is now testing a publicity campaign in Tennessee, Illinois, Texas and Puerto Rico to persuade more senior citizens to sign up for direct deposit.
The message: With direct deposit, you get your money faster and more reliably, and you do not have to make a special trip to the bank.
But the government may face an uphill battle convincing senior citizens, disabled people and others receiving federal benefits. Many do not have a bank account, do not trust technology or are simply attached to the idea of getting a paper check, the study found.
If they do not switch, the cost of sending paper checks will continue to climb as more and more baby boomers are added to the Social Security rolls.
Roughly 78 percent get direct deposit right now. To get more people to switch over, the U.S. Treasury and the Federal Reserve Bank are working with community organizations, faith-based groups and financial institutions.
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