Under a U.S. Department of the Treasury rule, on March 1, most federal benefit will require and electronic payment instead of by paper check. Recipients receiving their Social Security benefits electronically are allowed to request direct deposit or they can have the benefit deposited in to a debit card called Direct Express.
On Feb 27, the U.S. Department of Housing and Urban Development (HUD) issued a policy directing owners to treat Direct Express Debit Cards like a savings account, requiring only a balance no more than 120 days old.
This is good news as it enhances owner ability to obtain adequate documentation (current vs. 6 month average balances), and reduces potential undue cost to tenants (Direct Express Debit charges cardholders a fee in order to send monthly statements, and does not verify records of monthly activity, unlike typical bank account services).
Therefore the new policy articulates that "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. And 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."
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. 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.
The full HUD posting of the policy change follows:
RHIIP Listserv Posting #296 February 27, 2013
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Social Security Benefits Move Fully Electronic
Effective by March 1, 2013
Clarification on the Treatment of the Direct Express Debit Card
The U.S. Social Security Administration has a new policy which will eliminate the option for Social Security and SSI recipients to receive their benefits in the form of paper checks beginning on March 1, 2013. Recipients will continue to have the option to use direct deposit for their benefits or they may choose to receive a “Direct Express Debit Card.” The debit card is automatically loaded with a recipient’s benefits on the appropriate payment day of each month. The card is not associated with the recipient’s bank account and funds cannot be added to the card by the card holder.
We have received several inquiries about the Direct Express Debit Card and how it will affect income and asset calculations for tenants of 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. The balance on the Direct Express Debit Card is also considered an asset and will be verified consistent with existing savings account verification requirements. 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. This balance can be obtained from an ATM, though the online account service, or a paper statement. The verification document must identify the account and the account holder. If the total household assets do not exceed $5,000, no income will be derived from this asset. If household assets exceed $5,000, assets should be imputed at the standard rate of 2%.
For more information, please visit the SSA website at: http://www.ssa.gov/pubs/10073.html
Electronic Payments: The Best Way to Get Benefits
Currently, more than 94% of Social Security beneficiaries and nearly 83% of Social Security Income beneficiaries receive their monthly benefits electronically, the safest and most reliable method of payment delivery.
“This important change will provide significant savings to American taxpayers who will no longer incur the annual $120 million price tag associated with paper checks and will save Social Security $1 billion over the next 10 years,” Treasury Fiscal Assistant Secretary Richard L. Gregg said in a release.
People still getting paper checks have the option of direct deposit to a financial institution account of their choice or Treasury's Direct Express® debit card program. Advantages and enrollment information are available online at GoDirect.org.
Exceptions
Individuals may request an exemption to the electronic payment requirement from Treasury Department. More information on exemptions is available from Social Security Online.