The Social Security Administration (SSA) announced a big change to the program starting Sept. 30, 2025 — but don’t worry, it’s not a cut to benefits. Instead, that’s the day that the SSA will stop issuing paper checks. This shift to completely digital payments isn’t meant to inconvenience beneficiaries; rather, it’s a huge cost-saving move on the part of the government.
Although a seismic shift in terms of transitioning from old ways to new, very few beneficiaries will actually be affected by the switch to electronic payments.
According to the SSA, less than 1% of beneficiaries currently receive paper checks, which is a staggeringly small percentage. Nonetheless, with nearly 74 million Americans receiving benefits, that still amounts to almost three-quarters of a million recipients.
To make a smooth transition and ensure they don’t miss out on any payments, those beneficiaries will have to switch to one of two electronic payment methods, per the SSA:
Enroll in direct deposit: This is probably the easiest and most common method. Much like you would get a direct deposit from your employer into your bank account, you can sign up for direct deposit of your Social Security benefits.
Get a Direct Express® Card: If you don’t have or want a bank account for whatever reason, you can receive your benefits via a Direct Express® card. This is a prepaid debit card that the SSA reloads every month. Like any other prepaid card, you can use it to make purchases or pay bills. You can also get cash from an ATM machine using the card.
Change can be uncomfortable for many, particularly when it comes to handling money. The SSA understands this and offers these helpful answers to questions beneficiaries may have regarding the change:
Although the internet can be helpful, if you’re uncomfortable with it, you can still get your payments. As the SSA points out, electronic deposits do not require internet use. If you go the direct deposit route, you can visit your local bank teller to get your money without using the internet. With the Direct Express® card, you can simply use it like a debit or ATM card, no internet necessary.
There are four simple ways you can set up your electronic transfer:
Call the Social Security Administration at 1-800-772-1213.
Visit your local bank or credit union and provide the necessary account information.
Enroll the Direct Express® card by calling 1-800-333-1795.
You may want to work with a trusted family member or financial advisor when it comes to managing your money. But the electronic deposit process should make budgeting and planning easier.
With a paper check, you have to wait to receive it in the mail, hoping it is not delayed or lost, and then go visit your bank and make the deposit, in some cases waiting for the check to clear. With electronic deposits, your money comes in on the same day every month, automatically appearing in your account with no hassle.
According to the SSA, there are four major benefits to using electronic payments:
Security: Paper checks in the mail are an easy target for thieves and fraudsters. Electronic payments, although theoretically capable of being hacked, are a much harder target for criminals.
Reliability: Once you set up your electronic payments, you’ll receive the same amount on the same day every month. You won’t have to worry about delays that can hit the postal system.
Convenience: It’s hard to argue that electronic deposits are not more convenient than paper ones. Funds automatically appear in your bank account or debit card and don’t require trips to the bank – or even to your mailbox. While convenient for everyone, it’s particularly helpful for those with mobility issues or who live in remote areas, far from any bank or post office.
Cost savings: In an era when the national debt is spiraling out of control, any cost savings the government can muster should be applauded. In the case of Social Security payments, the cost savings are potentially huge. When the government issues a paper check, it costs about 50 cents. But electronic transfers only cost about 15 cents per transaction, per Newsweek. Between that and other administrative costs, the government stands to save billions of dollars in expenses.
‘It’s scary’: American families are homeless, unable to pay mega bills after Social Security benefits blunder. Lawmakers want to put a stop to it — will Congress come to the rescue?
Social Security is meant to be a safety net for the disabled and retired. It delivers about $1.4 trillion in benefits to millions each year.
However, the federal agency that runs it has been aggressively trying to claw back billions of dollars from those it now says it overpaid.
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An investigation by KFF Health News and Cox Media Group revealed that the Social Security Administration had demanded repayments from more than 2 million people a year. Beneficiaries were asked to repay amounts which sometimes reached tens of thousands of dollars.
When Woods, who has lupus and congestive heart failure, couldn’t repay that amount, she was told her monthly checks of $2,048 would be withheld until it was enough to cover her debt.
KFF and CMG say their reporting on the matter has triggered a congressional hearing, additional Senate oversight of the agency, an apology from the head of the SSA to Congress about understating overpayments, and an ongoing internal policy review.
In November, two senators on the Senate subcommittee that oversees Social Security wrote a letter urging the SSA “to take additional action to reduce overpayments and prevent undue harm on the most vulnerable Social Security recipients when recovering overpayments.”
In December, the Senate Finance Committee said it’s “going to watchdog Social Security’s overpayment program, and will meet with Social Security every month until it is fixed.” Chairman Ron Wyden wrote, “We were told in the past that Social Security was fixing the problem. That clearly has not been the case.”
Under its new head Martin O’Malley the SSA has proposed using information from payroll data providers to reduce improper payments.
The SSA’s overpayment problem
In the fiscal year 2023 (Oct. 1, 2022 to Sept. 30, 2023), the SSA recovered over $4.9 billion in overpayments, but it ended the year with $23 billion of overpayments still uncollected.
According to KFF Health News, the agency has admitted in the past that many overpayments were the result of errors by the government rather than the people — often elderly, poor or disabled — receiving the extra money.
Those getting Social Security benefits typically spend their checks on critical living expenses and health care. They’re not stashing it away to cover unexpected four- or five-figure repayment bills from the SSA.
For some, the repayment burden is life-altering. As part of its probe into the matter, WSB-TV Channel 2 Action News spoke with Nicole Eberhart at an extended-stay hotel, where the legally-blind mom is now living after losing her $1,700 monthly disability check from the SSA due to overpayments.
“I was using that money to actually pay for the apartment we were living in,” she told consumer investigator Justin Gray, who has been digging into the overpayments issue for three years.
As a result of the months-long investigation in partnership in KFF Health News, SSA Acting Commissioner Dr. Kilolo Kijakazi said in Oct. 2023 that she plans on “putting together a team to review overpayment policies and procedures to further improve how we serve our customers.”
In the meantime, here’s what you can do if you receive a dreaded repayment notice in the post.
Paying back benefits
As of December 2023, there were 67 million Americans receiving Social Security benefits. Of that total, over 8.5 million Americans were claiming disability insurance from the SSA, receiving an average monthly benefit of $1,395, according to federal data.
With numbers like that, it is only natural that mistakes can and do fall through the cracks — but the SSA does have official procedures in place to resolve payment issues.
“Benefits are overpaid when we can’t accurately calculate your benefit amount because our information is wrong or incomplete,” the SSA explains online. “It can happen if you don’t share updates with us about what’s changed in your life, like your ability to work, living situation, marital status or income.”
If you receive a letter from the SSA which says you got more money than you should have, you have at least 30 days (plus five mail days from the date of the notice) to pay back the full amount. If you fail to do so within that time frame, the SSA will start collection of the overpayment — potentially by reducing or halting Social Security monthly benefits, or garnishing wages and federal tax refunds — unless you submit a timely request for a waiver or reconsideration.
How to reduce or appeal your repayment
A shock Social Security repayment notice doesn’t have to end in your financial ruin. There are ways to request help from the SSA.
If you receive a valid overpayment notice but are unable to pay the SSA back within 30 days, you can request to repay your debt in smaller and more manageable monthly payments.
If you don’t agree you’ve been overpaid or the overpayment amount is incorrect, you can submit an appeal online or by mail. Make sure you have all of your medical information and supporting documents (including forms, legal documents, and written statements) ready before requesting a repayment consideration.
You can also ask the SSA to waive your repayment if you can’t afford it and feel the error wasn’t your fault, or if you think the overpayment is unfair for another reason. Again, the SSA may ask to see evidence of your income and expenses before they agree to waive your debt.
Receiving any type of payment demand can be scary — especially if you’re not expecting it — but the worst thing you can do is run from it. It is always worth contacting your collector to see if you can come up with a repayment plan that works for you and exploring other ways to improve your situation.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
