Social Security Administration Reverses Plan on Paper Checks: What Beneficiaries Should Know

An opened envelope with the return address showing the U.S. Department of the Treasury lies on top of a An opened envelope with the return address showing the U.S. Department of the Treasury lies on top of a United States government Treasury Check. The distinctive green checks feature an engraving of the Statue of Liberty and the Treasury Seal. The government checks are used to disburse income tax refunds as well as Social Security and Medicare benefits.. The distinctive green checks feature an engraving of the Statue of Liberty and the Treasury Seal. The government checks are used to disburse income tax refunds as well as Social Security and Medicare benefits. — (Image credit: Getty Images)

The Social Security Administration (SSA) was expected to phase out the use of Treasury checks to pay benefits by September 30, 2025, and has now reversed course. The move to end the use of paper checks was a result of an executive order signed by President Trump back in March.

While the SSA has decided to continue to issue payments by paper checks in limited circumstances, it "will continue to drive down paper check volume, which is less than 1% of total, by proactively communicating with beneficiaries about the advantages of enrolling in e-payments and the process for doing so," the SSA told Kiplinger in an email.

The SSA has been actively encouraging electronic payments in the form of direct deposit for many years due to efficiency and greater security. However, they haven't eliminated paper checks because some beneficiaries still rely on them, as they don't have a bank account or have difficulty with electronic methods.

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Paper checks will still be available "where a beneficiary has no other means to receive payment," the SSA told Kiplinger, rather than as the primary method of payment.

Why a paper check is a risky option

I get it. Old habits die hard. Having a physical representation of your money, in the form of cash or a check, is reassuring for some people. It might be even more true for people who spent most of their lives paying for items before the advent of smartphones and the internet.

I know that from personal experience; my father has never used an ATM card and still pays all of his bills by check. He only began using direct deposit because he had no choice then, as an employee of the U.S. Postal Service.

While you may be more comfortable receiving a paper check, let me tell you why it's in your interest to switch to direct deposit or to a benefit debit card. Social Security benefits that are paid in either form enjoy some very strong creditor protections that don't attach to a payment via paper check.

If you use either direct deposit or the benefit debit card approved by the Treasury Department, two months of benefit payments would be untouchable by commercial creditors.

Social Security benefits are generally protected from commercial creditors under federal law. Specifically, Section 207 of the Social Security Act states that these benefits are exempt from garnishment, levy, attachment, or other legal processes by most creditors. And the federal Consumer Credit Protection Act (CCPA) provides strong protections for Social Security benefits after they hit your bank account.

This means that private creditors, such as credit card companies, personal lenders, or medical debt collectors, typically cannot take your Social Security benefits to satisfy a debt. This isn't the case with paper checks.

If you cash a Social Security check and deposit the funds in a bank account, the money has none of the creditor protections I mentioned above.

Checks are familiar, but less secure

Paper checks leave your benefits vulnerable in several ways. Your mail can be lost, delayed, or damaged by adverse weather, or your check could be stolen, as mail theft is on the rise.

The Postal Service has experienced a surge in mail thefts and letter carrier robberies. From March 2020 to February 2021, the U.S. Postal Inspection Service received nearly 300,000 mail theft complaints; that’s more than a 160% increase compared to the same period a year prior. Not to mention the lack of creditor protection.

Donna joined Kiplinger as a personal finance writer in 2023. She spent more than a decade as the contributing editor of J.K.Lasser's Your Income Tax Guide and edited state specific legal treatises at ALM Media. She has shared her expertise as a guest on Bloomberg, CNN, Fox, NPR, CNBC and many other media outlets around the nation. She is a graduate of Brooklyn Law School and the University at Buffalo.