TN 91 (02-18)
GN 02402.001 Direct Deposit as a Form of Electronic Payment
A. Background of Treasury’s electronic payment process
The Department of the Treasury’s Fiscal Service (Treasury) requires that Federal payments be made electronically. As a result, all Social Security beneficiaries or recipients must receive their payments electronically. This includes new beneficiaries or recipients and beneficiaries or recipients who have been receiving check payment for a certain period.
B. Exemptions to the electronic payment requirement
Treasury may grant one of the following exemptions:
Treasury automatically grants an exemption in instances where:
the beneficiary or recipient was born prior to May 1, 1921 and continues to receive payment by check, or
the payment is not eligible for direct deposit to a Direct Express prepaid debit card account, or
the beneficiary or recipient’s Direct Express debit card has been suspended or cancelled.
Treasury may grant an exemption in instances when a beneficiary or recipient requests an exemption from the electronic funds transfer (EFT) requirement and the beneficiary or recipient:
has a mental impairment that prevents him or her from handling their payments electronically and he or she is not assisted by a representative payee.
lives in a remote geographic location that does not have the infrastructure necessary to receive payments electronically.
NOTE: Foreign beneficiaries who refuse electronic payment are not required to apply for an exemption. See GN 02402.201B for more information concerning foreign beneficiaries.
Individuals who indicate that an EFT payment would impose a hardship because of a mental impairment that prevents them from handling electronic payments or reside in a remote geographic location within the U.S., which lacks infrastructure to provide electronic payments, must apply with Treasury for an exemption.
Treasury will require the individual to sign a certification before a notary public and under the penalty of perjury.
NOTE: Treasury is responsible for determining if an individual is eligible for an exemption. SSA is not responsible for the exemption determination or its development.
C. What is the Direct Deposit process?
For individuals who file for benefits on or after May 1, 2011 and do not allege one of the exemptions to the electronic payment requirement, take the following actions:
Advise the individual of the electronic payment (direct deposit) requirement.
Inform the individual that he or she must receive payment by direct deposit, and discuss its advantages as stated in GN 02402.005G.
If the individual does not have a bank account, discuss the Direct Express debit card and its advantages as stated in GN 02402.007. NOTE: Do not use a protective filing or development date solely to exempt a claim from the electronic payment requirement. Claims filed before May 1, 2011 are not subject to the electronic payment requirement, regardless of when we adjudicate the claim.
If the individual does not agree to electronic payment, tell the individual, “We will temporarily pay you by check and Treasury will contact you at a later time to discuss how you will receive your benefit payments in the future.”
As of March 1, 2013, Title II beneficiaries and Title XVI recipients must select a form of electronic payment or apply for exemption. Treasury is responsible for reviewing the request and making a determination. Treasury will contact the individuals directly once they make a determination.
To maintain good public relations field offices (FOs) must:
Maintain lists of financial institutions (FIs) in their area that offer low cost banking services; or
May prefer to maintain a list of all FIs in the area, with the type of accounts they provide, and the approximate cost of the accounts; or
List FIs offering Electronic Transfer Accounts (ETA); and
Update the lists every two years to ensure their accuracy.
GN 02402.067, Electronic Transfer Account (ETA)