If you receive federal benefits, you probably expect them to arrive promptly each month and in the amount you expect, even if by check. However, a March 2025 executive order called “Modernizing Payments To and From America’s Bank Account” announced the end of paper checks for most government payments by September 2025.
The move aims to address concerns about paper checks' slow arrival in the mail and how they can often go missing (or even be used fraudulently). While many Americans already get their benefit payments electronically, enough people still get paper checks to make this change a newsworthy one.
Certain details still need to be worked out, but the change affects Social Security, SSI, VA benefits, unemployment, and other federal payments. Here is more information on how this change could affect you and the actions you should take now to be prepared, even if you don’t have a bank account.
Why paper checks are ending
Many U.S. departments already require benefit recipients to sign up for digital payments, so this recent change may not be news to you. However, you may be wondering why the move away from paper checks is happening to all payments from the federal government.
The U.S. Department of the Treasury reports that paper checks are 16 times more likely “to be lost or stolen, returned undeliverable, or altered” compared to electronic funds transfers (ETFs). Not only are paper checks less reliable, but they cost a significant amount (over $657 million annually) to digitize as part of the Treasury’s record-keeping process.
Between the delays, fraud risk, and costs, it makes more sense to move to digital payments, which is why there’s a renewed urgency to move everyone away from checks.
While there’s support for this change from organizations like the Association of International Certified Professional Accountants (AICPA), even they have concerns that it may be hard for some consumers to get ready in time. People who may find it difficult to accept electronic payments include:
- Seniors without access to digital or online banking services
- Foreign visitors, students, and workers who receive U.S. tax refunds
- Others in the “unbanked” population
The AICPA has recommended allowing more time or broadening the exemptions listed in the executive order, which claims to offer an exception for “individuals who do not have access to banking services or electronic payment systems.”
This extension isn’t guaranteed, though. It’s merely a recommendation.
What happens if you don’t act?
Assuming the government goes ahead with the September 30, 2025 deadline, you have a very short time to get ready for electronic payments to arrive. If you don’t have a place for the money to be deposited, your payment could be delayed. There are some exceptions mentioned in the executive order, but we don’t know who will qualify exactly and what you’ll need to do to keep the checks coming. Even the exemption process could delay payments.
Also, the electronic policy affects payments you send to the government, such as estimated quarterly tax payments or a federal tax return fee. According to the executive order, the Treasury will get rid of physical lockbox services used for receiving fees, fines, loans, and taxes. You may not be able to pay these things on time and get credit without some kind of online account or payment service. Failure to pay, in the meantime, could result in additional fees or penalties.
The only way to avoid disruption is to switch over to direct deposit well before the September 30 deadline.
Benefits of using direct deposit
Whether you’re expecting a few hundred dollars or a few thousand from the government, direct deposit can make a big difference. Some of the advantages of this payment method include:
- Faster access to funds. While paper checks take several days to be printed, mailed, and deposited into your account, direct deposits can be in your account within 1-2 business days from the payment date.
- More reliability. Paper checks can get lost in the mail, requiring you to contact the government and get the payment reissued. Direct deposits don’t involve the postal service at all and are guaranteed to be delivered to the account you choose.
- Enhanced security. Printed checks are susceptible to theft or forgery. All it takes is someone stealing it from your mailbox! An electronic payment goes from the Treasury to your bank without any chance of a thief getting their hands on it.
- No need for a traditional bank account. Many consumers do choose to have their payments sent to a checking or savings account, but that’s not the only option available. With options like Direct Express or prepaid debit cards, even those without traditional banking services can get paid securely and promptly.
If you’ve ever worried that your government benefits won’t get to you on time (or at all!), direct deposit eliminates a lot of the guessing. It’s a very convenient and trackable way to get paid.
Options for people without bank accounts
If you don’t currently have a checking or savings account, it doesn’t mean you can’t receive your electronic benefits payments. The following methods work well for Social Security, SSI, and other payments you get from the federal government.
Direct Express Debit Mastercard
The Direct Express Debit Mastercard is the official debit card for benefit recipients. You can sign up via each of the agencies that issue payment or through the Direct Express website. Each month, your benefits get deposited directly onto your card, which can be used at any bank, credit union, ATM, or retailer that accepts Mastercard.
There are no fees to sign up, use the card, or get cash back with a purchase or at a bank or credit union. There’s one free ATM cash withdrawal for each deposit made each month. Additional fees may apply, but you do not need a separate bank account to use this debit card.
Netspend Debit Account
Another direct deposit option is by using the Netspend Debit Account which will come with a debit card. Similar to the Direct Express card, you don’t need a separate bank account to use the card. Simply give the benefits administrative office your Netspend® Debit Account1 routing number and account number, so they can direct deposit the account with your benefits each month. Then, when you’re ready to shop or pay bills, you can use your funds as you would a typical debit card.
Netspend® Debit Account will also work with digital wallets such as Google WalletTM and Apple Wallet, so you can tap to pay with your mobile device through Google Pay and Apple Pay. You can even load2 your paycheck onto the same Netspend account to have all your funds in one place. This may be the ideal option for those who work and receive government benefit payments but don’t have immediate access to a traditional banking account.
Banking services provided by Pathward®, National Association, or Republic Bank & Trust Company; Member FDIC.
Low-barrier checking account
Finally, it’s possible to open a checking account to receive your federal benefits, even if you haven't been able to easily get one in the past. Several banks and credit unions offer checking accounts with relatively few requirements. These accounts are sometimes called “low-risk” checking accounts, as they don’t allow overdrafts or even check writing, in some cases.
With minimal to no fees and designed for first-time account holders, the accounts may not be marketed very openly. Your best bet is to check with your local credit union and see what type of basic checking accounts they offer.
List of government agencies benefits impacted by the end of paper checks
While all federal benefits will switch to electronic-only (and all work with the options listed above), each may have a slightly different process for setting it up.
Here is a list of some of the payments you might receive, along with the agency to contact about having the deposit put onto your Netspend® Debit Account, your checking account, or to the Direct Express card. (You can also enroll via the GoDirect website.)
- Defense Finance and Accounting: DFAS Annuitant Pay, Retired Military Pay, Former Spouse Pay
- Department of Labor: Black Lung, Federal Employee Workers Comp, Longshore and Harbor Workers Comp, Energy
- Office of Personnel: Civil Service Retirement, Civil Service Survivor
- Railroad Retirement Board: Railroad Retirement Annuity, Railroad Retirement Unemployment and Sickness
- Social Security Administration: Social Security Retirement, Survivors, and Disability Insurance or Supplemental Security Income (SSI)
- Veterans Affairs: Veterans Compensation and Pension, Vocational Rehab, Compensated Work Therapy, Medical Research (and others)
These are just a sample, and other benefits should be addressed with the department that signs your checks each month. You can visit their respective website for more information on what to do next.
Act today to ensure you continue receiving benefits
Even though some agencies have been moving over to electronic payments for a while, this year marks the first time government payments will be changing for everyone. It’s best not to wait until you get notified and take matters into your own hands. By reviewing the options, picking the one that’s best for you, and setting up your free account now, you can avoid delays this fall — and even get a head start on convenient features to make your financial life easier.
