AYESHA RASCOE, HOST:
September 30 is the last day the government is fully funded unless Congress takes action. It's also the last day to switch over your tax refunds, Social Security and other federal payments to online direct deposit. Starting next week, the government will only issue paper checks for rare exceptions. This follows an executive order President Trump signed in March. Electronic payments are faster to process and can better protect from theft, but there's still a fraction of the population that prefers or requires a physical check. Here to explain is Kathleen Romig from the Center on Budget and Policy Priorities. She was also a former Social Security administrator. Welcome to the program.
KATHLEEN ROMIG: Thank you for having me.
RASCOE: So just how many people are left who haven't switched over to direct deposit already?
ROMIG: Well, in Social Security, well over 99% of beneficiaries are already getting electronic payments. That's the product of really decades of work by the government to make sure that beneficiaries are getting electronic payments whenever possible. But when you look at a program like Social Security, just a fraction of 1% of Social Security beneficiaries adds up to hundreds of thousands of people. So that's what we're dealing with now.
RASCOE: Who are these people? Like, what types of communities are we talking about who are still getting these paper checks?
ROMIG: It tends to be the most marginalized people, people who are, for example, unbanked or homeless or really struggle with digital tools. It tends to be very old beneficiaries who have been receiving benefits for a long time.
RASCOE: So we know that recently the Social Security Administration has had some difficulties. There have been staffing cuts, which has led to longer wait times, and people are being unable to reach a human when they're trying to call. So how will that affect this Tuesday deadline?
ROMIG: So there are online tools that people can use to either request a waiver or to set up an electronic payment, but those tools might not work for the people who are the hardest to reach. And so for those people, it might be that they need a bit of handholding, a bit of in-person assistance. And it's pretty hard to get through to the Social Security Administration on the phone these days. It takes over an hour, and it can be really hard to get a person to help you at a local field office.
RASCOE: So what type of exemptions is the government making for those that may have difficulty switching over? Like, how would you qualify for an exemption?
ROMIG: Yes, the government is still providing exemptions in dire need situations, people who truly can't access the banking system, and also the oldest of beneficiaries. And there is a way to apply for a waiver. That's through the Treasury Department. Otherwise, they are going to need to sign up for a direct deposit payment. Or if they don't have a bank, then sign up for what's called a direct express card. It's sort of like a debit card where their benefits will be deposited each month.
RASCOE: And so when you say some of the oldest beneficiaries, how old is old?
ROMIG: Beneficiaries who are over 90 years old may qualify for an exemption.
RASCOE: The Treasury Department is saying that, you know, switching to electronic payments will save money because it costs more to issue a paper check. It's about 50 cents to issue a paper check versus only 15 cents for electronic funds. Was there a real need to make this change? Did it have to happen now?
ROMIG: So it is, on average, of course, cheaper to issue an electronic payment than a paper check. But when we're talking about reaching the people who are the hardest to reach, when that might require multiple phone calls or an in-person visit to help navigate the process, the cost-benefit analysis might not work out the same. The other thing is the Social Security Administration has been strongly encouraging - and even requiring - electronic payments for many years now for new beneficiaries. So there is a question about whether it really makes sense to expend all of this additional effort in order to move just that last fraction of a percent onto electronic payments when so many people are getting electronic payments already.
RASCOE: If you're a person who is or you know someone who is still getting a paper check and they're having difficulties getting direct deposit, do they have to worry about getting their money after this deadline?
ROMIG: So the Social Security Administration spokespeople have been saying that they're not going to discontinue people's checks. If they did, that really would be a catastrophe for many of these people because, again, these are the most marginalized people who really rely on those benefits in order to make ends meet.
RASCOE: The federal government will run out of funding on September 30. If Congress does not pass a spending bill, there will be a government shutdown. Would that affect this electronic payment deadline?
ROMIG: As far as I know, it would not. The Social Security benefits themselves are paid during government shutdowns. Those are not subject to the annual appropriations process. And historically, the Social Security offices and the 800 number have also stayed open even during a government shutdown. Now, we don't know that for sure because the Trump administration hasn't put out its contingency plans for a shutdown this year yet, but that's what's always happened in the past.
RASCOE: That's Kathleen Romig with the Center on Budget and Policy Priorities. Thank you so much for joining us.
ROMIG: Thank you. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
