Author: Catherine M. Callery (Kate)| Louise M. Tarantino

Many Social Security and SSI recipients have encountered problems with receiving their monthly benefits in the mail or even by direct deposit into their bank accounts.  Problems with lost or stolen paper checks are not uncommon, and of course, exempt Social Security and SSI checks supposedly protected in claimant’s bank accounts have nonetheless been subject to seizure by creditors. [The July 2008 Disability Law News, available at www.empirejustice.org, reported on New York’s new Exempt Income Protection Act (S.6203/A.8527), which will better protect statutorily exempt income from access by creditors.]

The U.S. Treasury’s optional Direct Express stored value/debit cards allow beneficiaries to receive their monthly payments without the hassles of paper checks or bank accounts. Since its inception in April 2008, the Direct Express card has attracted over 446,000 recipients.  It can be used to make purchases and cash withdrawals wherever MasterCard debit cards are accepted, to obtain post office money orders, and to withdraw cash from ATMs.

The Direct Express card eliminates the expense of check cashing services, as well as the risk of stolen checks. It also substantially reduces the danger of exempt Social Security and SSI funds being garnished by creditors.  Because the card can only be used to receive Social Security and SSI, exempt funds are never comingled with nonexempt funds.  According to the Treasury Department, Comerica, the bank that operates the Direct Express system, will not allow a freeze or garnishment of the money “on” the cards, except to the extent allowed by federal law (i.e., child support, and offset of federal debts against Social Security but not SSI funds).

Additionally, Direct Express does not require a credit check or a minimum balance.  Unlike bank accounts, there are no overdraft fees or bounced check charges.  Rather, if the account has a zero balance, the transaction will be declined without a fee.  Unlike many bank accounts, there is no monthly fee, although there is an optional $.75 charge for a monthly statement.  The first ATM withdrawal each month is free; subsequent withdrawals are $.90.  There is no charge for cash withdrawals at a MasterCard member bank.

SSA only notified beneficiaries receiving paper checks of the availability of Direct Express.  It is, however, available to all recipients.  More information about Direct Express can be found at www.usdirectexpress.com.