Americans receiving payments for Social Security, unemployment insurance, veterans benefits, IRS tax refunds, railroad retirement, and government benefits will now find the money automatically deposited into their personal bank accounts. Americans without bank accounts can get paid using the Treasury Department's Direct Express Debit MasterCard program.
Why the shift to direct deposits? Two reasons:
- it will be easier and faster for consumers to get paid and,
- it will save taxpayers money - an estimated $303 million over the first five years and about $120 million each year after that.
For instance, despite repeated attempts to get recipients to convert to electronic payments, the Treasury Department still mails out more than 136 million benefit checks each year. Now, as part of President Obama's effort to eliminate waste and modernize government for taxpayers, that will change.
The Treasury published a notice of proposed rulemaking in the Federal Register to begin a 60-day period of public comment. Once the final rule is published, the administration will roll out the changes with a public education campaign.
The new rule will primarily take effect in March 2011, with a few exceptions that will not take effect until March 2013.
This will propably not effect the 2010 tax season (Jan-April 2011)