As the runup to the change in how the U.S. Treasury Department paid out benefits for Social Security disability and Supplemental Security Income took place, we described on our blog how the changes would affect recipients in Oregon. Now that the change has been in effect for several months, there are some possibly disturbing trends that have emerged — especially in regard to fraud and new fees.
All existing recipients of SSDI and other kinds of Social Security benefits had a choice to make by this past March: receive payments by direct deposit to their bank accounts or receive funds on a prepaid debit card. While many people received benefits via direct deposit already, there were still millions of people who got a paper check in the mail every month. With the elimination of this option, the federal government expects to save billions of dollars. It cost more than a dollar to create and mail a paper check, while the fees around direct deposit are minimal.
What has come under fire is the debit card option. Unlike many conventional credit and debit cards, the government-funded cards carry fees for many basic transactions such as ATM withdrawals and online bill payments. This can further stretch budgets of people dependent on every dollar they can get.
Another issue that has come up regarding the new payment choices is fraud. The government estimates that $28 million in benefits were stolen in a year-and-a-half long period by swindlers who were able to redirect payments to bank accounts that they controlled.
For someone who has been approved to receive Social Security benefits, making sure that the funds actually arrive as expected is crucial. People who are experiencing problems around issues such as these might benefit from working with an attorney who has experience in dealing with Social Security benefits claims.
Source: Main Street, “Are Fees, Fraud Eating Away at Your Social Security?” Shelby Bremer, July 1, 2013