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Social Security in the bank

Starting Aug. 1, the Social Security Administration will electronically deposit checks directly into the accounts of recipients who apply for benefits after Aug. 1. That should make life a lot simpler for everyone.

Initially, the automated deposits will apply only to those who have checking accounts. Others will receive paper checks. Today, direct deposit is optional, with 61 percent of the 43-million people receiving Social Security taking advantage of it.

The government should have gone to this system decades ago. Phil Gambino, a spokesman for Social Security, said direct deposits will save the government about $5-million during the next five years and will eradicate about 100,000 forgeries, thefts and lost checks each year. More important, perhaps, direct deposit will protect many people in low-income, crime-ridden areas. In some of these neighborhoods, recipients are routinely mugged, and others are victims of scams.

The program also will give those without checking accounts an incentive to open one. Meanwhile, the Treasury Department is exploring ways to encourage banks to establish a debit card service that will permit Social Security recipients without checking accounts to make electronic withdrawals. Recipients are free to refuse the direct deposit program.

Senior citizen advocate groups hail the new system and would like to see all Social Security recipients use it. Mary K. Little, a lawyer with Gulfcoast Legal Services Inc., said her agency handles cases of clients who have had checks lost or stolen. She fears that many older recipients, not wanting to deal with banks, will demand to have cash. "They will be hard to deal with," she said. "They will need to be educated."