Social Security makes screeching U-turn on controversial policy

Daily Mail​

2 days ago

Social Security will continue mailing paper checks — in a major U-turn from a previously announced plan.
The agency had planned to halt checks after September 30 to cut costs and reduce fraud, shifting entirely to electronic payments.
Paper checks cost about 50 cents to issue, compared with 15 cents for direct deposits, officials said.
But the agency has now reversed course, saying that it will continue to issue paper checks for Americans who have no other means of getting payments, a spokesperson confirmed to DailyMail.com.
This includes both recipients of retirement and disability benefits.
Despite the about-face, the agency urged people to switch to direct deposit if they can.
'We will continue to drive down paper check volume, which is less than 1 percent of total,' the spokesperson said.
The news comes as a grim new forecast this week warned Social Security's retirement fund is set to run short in just seven years — which could end up meaning benefits will be slashed for millions of recipients.
The check U-turn came after pushback from Massachusetts Democratic Senator Elizabeth Warren.
Warren met with Social Security Commissioner Frank Bisignano on Wednesday and asked about the plan to discontinue paper checks, according to CBS News.
'There are about 600,000 Americans who still receive their paper checks — it's a small fraction of people who receive Social Security payments, but it's a population that often needs checks through paper' instead of through electronic deposit, Warren said.
She added that Bisignano made a commitment that 'no one would be left behind.'
Millions of Americans are 'unbanked,' which means they do not have a traditional checking or savings account at a bank or credit union.
The reasons why can vary, from past money mistakes to losing a job or not having enough money to meet minimum balance requirements.
These people tend to rely on alternative banking services, such as check cashing establishments, in order to access vital funds.
But paper checks are also more than 16 times more likely to be reported stolen or lost compared to electronic transfers, according to government data. There is also a higher chance that they will be returned deliverable or altered.
The policy reversal came after pushback from Massachusetts Democratic Senator Elizabeth Warren
Social Security relies on its trust funds to provide monthly benefit checks to around 70 million
Americans who still receive paper checks but are able to switch can provide a bank account or credit union for direct deposits or an approved pre-paid debit card.
Registration can be completed at the government's Go Direct website.
The policy reversal comes after latest forecasts painted a grim picture for the future of the program.
Social Security's retirement fund is set to run short in just seven years — which could end up slashing benefits for millions of Americans by thousands of dollars a year.
According to latest projections, retirees could face automatic 24 percent benefit cuts as early as the end of 2032.
This means a couple who both worked would receive $18,100 less each year if they retire at the start of 2033.
The new forecast from the nonpartisan Committee for a Responsible Federal Budget (CRFB), released Thursday, moves up the insolvency date for both Social Security and Medicare trust funds.
A projection just last month had funds lasting until 2033, but that has already been revised.
A major factor is the impact of President Donald Trump's 'Big, Beautiful Bill ', which experts warned would speed up the use of funds.