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The Social Security Administration (SSA) recently announced they are sending new Direct Express cards to people on Social Security. It’s a move that’s expected to impact millions of people, and it comes less than a year after the government organization stopped sending out physical checks to beneficiaries. Below, we share everything Americans need to know about this change in benefit payments and reveal whether it’s expected to impact June payments.
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What is a Direct Express card?
Direct Express cards are issued by the government to recipients of federal benefits. They are primarily used by people receiving Social Security, Supplemental Security Income (SSI) and Veterans Affairs (VA) benefits, but in some cases, other government agencies—including the U.S. The Coast Guard and Department of Labor—will use these cards to process payments.
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What changes are being made to Direct Express cards?
On Monday, May 18, the SSA revealed that the U.S. Department of the Treasury’s Bureau of the Fiscal Service would be switching their financial provider from Comerica Bank to Fifth Third Bank. They didn’t share why, but many believe it’s to improve the overall user experience.
“The goal appears to be modernization, including improved online access, app functionality and overall user accessibility,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek. “In many ways, it maintains the status quo while updating the technology behind the program.”
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As a result of the change in financial provider, millions of Americans who rely on the Direct Express prepaid debit cards for their monthly benefit payments will be forced to get a new card. This includes people on Social Security, and many experts warn this change could do more harm than good.
“The 3.6 million people on Direct Express are disproportionately elderly, disabled and unbanked,” Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek. “They’re the least likely to work through a card transition smoothly. And the most likely to face a gap in access if something goes wrong. One missed payment for someone living on $994 a month in SSI isn’t an inconvenience. It’s a crisis.”
Will the new Direct Express cards impact June Social Security payments?
Since the SSA doesn’t plan to send out the new cards until later this year or early next year, it’s safe to assume June benefits won’t be impacted. Once the cards are sent out, it’s believed there will be no disruption at all.
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“For recipients, this mostly means more of the same,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek. “Benefits should still arrive electronically on their normal payment date, but it could add value if the new system improves security and customer service.”
What to do when a new Direct Express card arrives
Once Americans get their new Direct Express cards in the mail, they can activate the card at 1-888-741-1115 or on the Direct Express mobile app. Upon activation, it is recommended that beneficiaries safely dispose of their old card.
“This change doesn’t add money,” Ryan said. “It’s administrative. The benefit amount stays the same. This is a servicer swap, not a benefit improvement.”
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