Social Security Disability Insurance Recipients Need Better Understanding of Pros and Cons of New Debit Card, Allsup Says
Social Security Disability Insurance Recipients Need Better Understanding of Pros and Cons of New Debit Card, Allsup Says
Belleville, IL (Vocus) March 27, 2008
Starting next month Social Security Disability Insurance recipients in some states will have the option of receiving their benefit payments electronically on a debit card, rather than via a paper check. However, eligible individuals — many of whom are “unbanked” — should have a clear understanding of the pros and cons of opting for the debit card, particularly the financial ramifications, according to Allsup (http://www.allsup.com), which represents tens of thousands of people in the Social Security Disability Insurance (SSDI) process each year. It also offers services that support the financial and health well-being of individuals with disabilities.
“Before signing on to or totally dismissing the idea of the debit card program, potential cardholders should look at how they are likely to use a card,” said Paul Gada, personal financial planning director of the Allsup Disability Life Planning Center. “For some, the card may make sense. For others, they may realize after looking at their spending habits that getting a bank account may really be the best option. And there will be others that will always operate with cash only, regardless of the drawbacks it presents.”
The debit card program, called Direct Express, is run by the U.S. Treasury Department through Comerica Bank with the intent to encourage Social Security recipients who do not have a bank account to elect to have their benefits loaded electronically onto a debit card. The Direct Express program will be introduced this spring in Arkansas, Louisiana, Oklahoma and Texas before being phased in across the nation during the summer.
The cost savings for the government could be significant, based on estimates from the Treasury’s Financial Management Service. For example, it cost 89 cents for the government to issue a paper check in 2006 compared with 9 cents to process an electronic payment. As a result, if the 4 million recipients of Social Security, SSDI and Supplemental Security Income (SSI) who don’t have bank accounts were to sign up for the debit card, the savings could be $ 44 million annually.
Having monthly benefits electronically deposited onto debit cards also has its advantages for recipients, most notably convenience and security. In the case of individuals with disabilities who may have limited mobility, for example, having the debit card would mean that they would not have to make a special trip to cash their SSDI award or be concerned if they were hospitalized or otherwise unable to retrieve their benefit payment when it was due to arrive. Additionally, funds on the card are FDIC insured, just like money in a bank account, so the money is fully protected if the card is lost or stolen; though a card replacement fee will be assessed the second time a card needs to be replaced in any given year.
Evaluating the Costs
While cost savings for the government — and taxpayers — are obvious, the cost savings may not be as clear-cut for debit-card recipients. They might end up paying even more in transaction fees than the average $ 6 to have a paper check cashed, especially if they don’t pay attention to how they’re using the debit card.
Among the questions Gada recommends potential cardholders consider before signing up for a debit card include:
How accessible to you is an ATM in the Comerica network?
How often would you make ATM withdrawals and would those ATM withdrawals be at in- or out-of-network ATMs?
How often would you use the electronic bill payment feature?
Will the companies you are paying electronically charge you a fee for electronic payment?
Is there a bank in your area that could provide you with a more cost-effective solution for the features you want, such as ATM, electronic bill pay or direct debit?
If you are concerned about opening a bank account, why is that and have you spoken with a local bank to see if they can help alleviate your concerns?
Social Security recipients participating in the Direct Express program are allowed one free ATM cash withdrawal per month from a designated ATM. They are assessed a 90-cent fee for each additional ATM withdrawal. Cardholders may be charged an additional “surcharge fee” by ATM owners outside of the Comerica Bank network, which issues the debit cards. Additionally, program participants have access to online bill payment for a fee of 50 cents per online bill payment and can receive a paper statement for a 75-cent monthly fee.
Gada advises potential cardholders to consider how they would use the debit card, looking at the trade-off between potential costs and benefits. For example, rather than having to pay for a cashier check or carry large amounts of cash and pay bills in person, incurring a small transaction fee for electronic bill payment may be worth it, particularly for individuals who have a difficult time getting around. However, he noted, individuals should check to see if the organization they are paying will assess an additional charge for accepting electronic bill payment.
On the other hand, individuals who are going to head for an ATM every time they need cash will find transaction fees quickly adding up to little added value.
“In these cases, it’s time to seriously consider what is preventing you from getting an account at your local bank, because that probably would be your best option,” said Gada. “Many banks offer no minimum balance checking accounts where you can have your Social Security benefits direct deposited and electronically pay bills or use their ATMs at no additional charge.”
Overcoming Banking Barriers
One of the reasons that some Social Security recipients continue to insist on paper checks is the fear that their bank accounts could be attached by creditors. However, under federal law, Social Security benefit payments are protected from attachment, meaning creditors do not have the right to take these funds from a recipient’s bank account. The same rules will apply to funds placed on Direct Express debit cards. There are a few explicit exceptions to the rules guarding against attachment of Social Security benefits. For example, Social Security funds can be taken to pay child support or alimony payments the individual owes.
“At any given time, there are likely millions of dollars in Social Security payments that are at risk because people on fixed incomes got into debt or are having a dispute with a creditor,” said Gada. “Unfortunately, they are acting on inaccurate information that has them afraid to put their money into bank accounts where it can be protected and they can be afforded other benefits of being banked.”
About Allsup:
Allsup is the nation’s premier Social Security Disability Insurance representation company. Since 1984, Allsup has helped more than 100,000 people with disabilities receive their entitled disability benefits. Today, the company has 500 professionals focused on helping individuals and their family’s nationwide gain the financial and health benefits they deserve. For more information, visit Allsup’s Web site at http://www.allsup.com.
Contact:
Dan Allsup
Allsup
(800) 854-1418 ext 5760
Mary Jung
(773) 429-0940
###
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Categories: Replacement social security card Tags: Allsup, Better, Card, Cons, Debit, Disability., Insurance, Need, Pros, Recipients, says, Security, Social, Understanding
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A Prepaid Visa Debit Card: The Better Choice for Consumers
Outlined below are just a few (of the many) benefits of prepaid Visa debit cards that are often overlooked.
No Debt
This fast paced world filled with enticing credit card offers has millions of people in debt. With a prepaid card, the money on the card is your hard earned money. The routine of swiping a credit card carelessly can be extremely detrimental. When using a prepaid visa debit card, your mind set is different than with the credit card philosophy of “buy it now, pay for it later.”
Free Direct Deposit
As with traditional banking accounts, you can have part or all of your pay checks directly deposited into your debit card account. Additionally, you can set up direct deposit for social security payments and other government benefits. If you don’t have a bank account, paycheck cashing services can be expensive and a hassle to get to after work. With a prepaid visa debit card, the deposits are free and the money from your pay check is automatically placed onto your card.
More Secure than Cash
Whether you’re going on trip or simply don’t like the hassle of carrying cash, a prepaid visa debit card has proved safer time and time again. Your card, account, and pin numbers are unique so they can only be accessed by you. Carry a small and discrete card instead of a wade of money. If your card gets stolen or lost, you can cancel it and transfer funds easily, if your cash gets lost or stolen, you are simply out of luck.
Pay Bills Online
Why mail a check or go directly to a merchant to pay with cash? The internet has made paying for almost any bill online fast and reliable, as it should be. Take advantage of this and use your prepaid visa debit card to pay for your gas, telephone, or electric bills. Many times you can remove the hassle associated with bill paying, such as getting the payments in on time or budgeting for the bill cost, by using a prepaid visa debit card.
Convenient (use anywhere Visa debit cards are accepted)
Often, people think that not having a traditional bank account will take away some of their freedoms when it comes to the ease of spending money. Almost anything you can do with a standard banking account, you can do with a prepaid debit card. You can get cash from ATMs worldwide and add money to your card with most checking and savings accounts. With a prepaid debit card, you will never be inconvenienced. From bank transfers, to online shopping or renting a car, there a variety of prepaid Visa debit cards allow you to spend your funds, any place, and any time.
No Surprises
Banks change account plans and have stipulations buried within their contracts. With a prepaid visa debit card, there are no hidden fees and no interest charges. You’ll always know where you money is located without being charged a fee to keep it safe and secure. Unlike traditional debit cards, you won’t have to worry about overdraft fees; you can only spend the money loaded onto the card. You can check your balance 24/7 online, via text, or with a customer service representative, so there are never any surprises when it comes to your money.
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It is a settled fact, as certain as death, that most American’s are not saving much for their retirement. This is due, conceivably, to a lot of factors but mostly because they lack proper discernment and awareness about different kinds of retirement benefits that the state and federal government have waged.
Added on this score, retirement planning has rarely been actively pursued in the American context. Most individuals never give retirement planning serious considerations.
The scenario laid above has different sets of parameters and intricacies that need to be explained in another set. However, this article focus on retirement benefits as provided for under the federally governed Social Security retirement benefits program.
Commencing with the wise details of the basic points regarding retirement benefits, it is necessary, above anything else that you confer with well adept counselors to help you hurdle with your specific situation. To be precise, you need the aid of a qualified social security attorney.
Noting, these experienced representatives can help you in all concerns relating to your pursuit of retirement benefits. They are capable of easing your way into retirement.
To start with, a must know is the constitutive retirement benefits qualification. When you have been working and paying for Social Security taxes, you may earn corresponding credits. These credits can work toward Social Security benefits.
To get the retirement benefits, you will need certain number of credits. Correspondingly, the number of credits needed to qualify for retirement benefit depends on your age. No retirement benefits can be paid until you acquired sufficient number of credits.
In reference to the retirement benefits amount, it all depends on how much one has earned during his/her working career. Higher earnings will have higher benefits. Conversely, lower lifetime earnings often result in relatively lower benefits.
Another important concern with this benefit is the requirement as to age. The Social Security law was recently changed, gradually increasing the full retirement age to 67, in view of the longer life expectancy. To reap the retirement benefits, one must attain the full retirement age.
However, there are specific cases of early retirement that are permissible. The pitfall of the latter instance is the permanent deduction of retirement benefits.
Enough for the personal qualification, the Social Security retirement benefits also provides some financial assistance for family members of a qualified retiree. The family members who may qualify for this benefit are limited to the following groups:
• The spouse aged 62 or older, or those younger than 62 but are taking care of a child covered in the retiree’s record and who is under 16 years old or disabled;
• a former spouse aged 62 or older (as well as a divorced spouse) and unmarried;
• children up to age 18, or up to 19 if they are still full-time students who have not yet graduated from high school and disabled children, irrespective of their ages
The benefit that each of the group related above are limited. The total benefits that the eligible family members should receive must not be more than the determined limits. A necessary reduction will be made if later found that the total benefits exceeded the set limits.
These were the condensed matters regarding Social Security retirement benefits.
To have a full view of the entire coverage of this area of Social Security benefit program, the effective assistance of a Social Security attorney should be employed. Having them to help you in this respect could give you a resolute and systematic approach in your retirement, which makes it a lot less laborious.
The longest of journeys in your Social Security retirement benefit claim start with a single step, that is, by securing the assistance of a competent and vigorous attorney.
Our expert Los Angeles attorneys have the expertise in providing professional legal advice and representations to retirement benefits claimants. For more details, log on to our website and fill out our free case evaluation form.
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