New Information about Social Security Payments and Direct Express Cards
If you have residents who still receive a paper check for Social Security or other federal benefit payments, they are required by law to switch to an electronic payment method by March 1, 2013. They can choose to get payments by direct deposit to a bank or credit union account or to a Direct Express® Debit MasterCard® card account. Many of your residents have already done this.
All information we have reviewed indicates that recipients who do not sign up to have their benefit checks delivered electronically will automatically begin receiving their benefits through the Direct Express card program. The Social Security Administration web site specifically states: “the U.S. Department of the Treasury may send your benefits via the Direct Express® card program to avoid an interruption in payment.”
The Treasury Department’s Go Direct website (www.godirect.com) gives the impression that Social Security will abruptly stop sending out checks on March 1. However, we have new information that indicates that this may not be the case. Reports from different periodicals indicate that SSA will not interrupt payments if a person does not comply nor will they switch a payment method automatically.
By March, SSA recipients receiving checks may get a letter offering assistance to help them switch to the debit card or direct deposit option. Apparently, recipients who have not switched to electronic payment will still get a paper check but will be contacted “in a more personal way”.
Who’s Impacted by End of Paper Checks?
The change applied to Social Security, Supplemental Security Income, Veterans Affairs benefits, and anyone who receives benefits from the Railroad Retirement Board, Office of Personnel Management and Department of Labor (Black Lung).
The Treasury Department will grant exceptions to the rule only in rare circumstances. Automatic waivers are granted to people born on or before May 1, 1921. Check recipients living in remote areas without sufficient banking infrastructure may apply for a waiver. Waivers may also be granted to recipients for whom electronic payments would impose a hardship due to a mental disability. Additional information about waivers can be obtained by calling 800-333-1795.
If a person born before May 1, 1921, has a representative payee, their benefit must be converted to electronic payment by the deadline. The exception granted for those born before May 1, 1921 does not apply to people with a representative payee. For more information about representative payee responsibilities, consult the Federal Benefit Agency.
Impact on Residents
If a resident has previously opted for direct deposit, nothing will change. If a resident previously opted to receive payments via the Direct Express Debit Card or other debit card, nothing will change.
How to Handle Payments Made via Direct Express Debit Cards
HUD has received several inquiries about the Direct Express Debit Card and how it will affect income and asset calculations for HUD subsidized properties.
In order to remain consistent with HUD regulations, benefits received through direct deposit OR the Direct Express Debit Card will continue to be treated as income since the payment is a regular periodic payment. The balance on the Direct Express Debit Card is considered an asset and will be verified in a manner consistent with existing savings account verification requirements. (See RHIIP ListServ 296 issued February 27, 2013).
Note: This is a change from previous instruction specifying that Direct Express Debit Card balances should be treated like a checking account using the average of the verified monthly balance over a six month period to determine the value of the asset.
Specifically, tenants who receive their benefit on a Direct Express Debit Card will need to provide an account balance no more than 120 days old at the time of recertification. (See HUD Handbook 4350.3 Revision 1, Change 3 Appendix 3 and Paragraph 5-17).
A current balance can be obtained from an ATM, through the online account service, or a paper statement. The verification document must identify the account and the account holder.
There are no fees to check the card’s balance at an ATM or online.
Direct Express Debit Cards do not provide interest income. If the total household assets do not exceed $5,000, no income will be derived from this asset.
If household assets exceed $5,000, income from assets is the greater of “actual income from assets” or the current imputed rate of 2%. (See HUD Handbook 4350.3 Revision 1, Change 3, Paragraph 5-7.)
Note: For families receiving only BMIR assistance, it is not necessary to determine whether family assets exceed $5,000. The rule for imputing income from assets does not apply to the BMIR program.
For more information, visit the SSA website at: http://www.ssa.gov/pubs/10073.html