Social Security to Transition to Electronic Payments on September 1, 2025

On March 25, 2025, the President signed Executive Order 14247, directing the Department of the Treasury to phase out paper checks for all federal disbursements no later than September 30, 2025. This action reinforces existing federal law and is outlined in the Executive Order titled Modernizing Payments To and From America’s Bank Account.

Previously, beneficiaries, recipients, and representative payees were required to switch to electronic payments by March 1, 2013. However, individuals without direct deposit accounts, or those who opted not to enroll in Direct Express (DE), were temporarily permitted to continue receiving paper checks. With the new mandate, all federal benefit payments – including Social Security and Supplemental Security Income (SSI) – must now be made electronically.

Acceptable Methods of Payment

Payments may be deposited using one of the following methods:

1. Direct deposit into a bank account.
2. Debit or credit card payments.
3. Digital wallets and real-time payment systems.
4. Other modern electronic payment options as authorized by Treasury.

What This Means for LIHTC and HUD Section 8 Certifications

When households receive federal benefits, such as Social Security, housing providers must:

• Verify Deposit Locations
  • Ensure to confirm where the benefit is deposited (bank account, prepaid card, or digital wallet).
• Follow HOTMA Requirements (If Applicable)
  • If one’s state has implemented HOTMA and one is completing third-party verifications, owners/agents (O/As) must collect third-party source documents dated within 120 days of the certification date.
  • These documents verify the balance of the account where federal benefits are deposited.
• Asset Self-Certification
  • If HOTMA (and State policy) allows households to self-certify assets under HUD’s current asset threshold HUD’s current asset threshold, make sure the account where benefits are deposited is included on the Asset Self-Certification form.
  • Whether the asset is listed on the Tenant Income Certification (TIC) will depend on the TIC version in use.

Exemptions

There are limited exemptions to the electronic payment requirement. Individuals who believe they qualify must file a waiver request with the Treasury Department.

• If a household has been granted an exemption, they may continue to receive paper checks.
• In these cases, owners/agents should note the file and retain a copy of the paper check or check stub to verify the household’s exemption from direct deposit.

Owners and Management Agents should be well trained in understanding the rules and regulations of the affordable housing programs pertaining to their properties as they relate to maintaining compliance. MLCM offers consulting services and training regarding various affordable housing programs. For more information on these services, don’t hesitate to contact us.

The information presented in this article is intended solely for informational purposes and should not be construed as consulting advice from M&L Compliance Management LLC.

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