Since May of 2011, federal regulations have required new applicants for Social Security benefits to sign up for electronic deposit of their monthly checks. Many Native American reservations, including Pine Ridge, currently lack the financial institutions necessary to seamlessly facilitate this transition. Photo Courtesy American Indian Center of Chicago.
PINE RIDGE RESERVATION, SOUTH DAKOTA – A move by the federal government last year to reduce taxpayer expenses by $1 billion over a 10-year period via paperless Social Security checks continues on its inaugural course throughout this isolated, impoverished community. Since May 1, 2011, the U.S. Department of the Treasury has required new applicants for entitled Social Security benefits to sign up for direct deposit of their monthly checks. The cost-saving measure was implemented in anticipation of the millions of baby boomers who have now begun to apply for monthly federal benefits. Paper checks are presently issued at a cost of just over $1 per check. In contrast, electronic deposits are made for around 10 cents per transaction. The change also affects new applicants for veterans’ benefits and Supplemental Security Income, among others. The almost one-year-old policy will not be extended to include all Social Security recipients until March 2013. “I personally think it’s unfair to require anything of the sort,” said licensed practical nurse Echo Mae Tischer, a former Rapid City resident who currently works with aging populations. “Offer it and encourage it, but don’t require it.” “It’s just another way for our government to help more people fall through the cracks. It’s also another way for them to track people and their habits, not to mention another way of taking away choices,” she said. According to the Social Security Administration, the switch is also aimed at reducing incidents of loss or theft of paper checks, claims that require the agency to reissue around 600,000 checks annually. Upwards of 18 million baby boomers are expected to be added to the retirement rolls over the next few years, according to the Treasury Department. Direct deposit has been an option for Social Security recipients since at least the late ‘90s, following passage by Congress of the 1996 Debt Collection Improvement Act. Since then, the federal government has been working toward electronic delivery of all government-issued checks, with the exception of refunds from the Internal Revenue Service. Of the approximately 60 million retirees, disabled, or differently abled, individuals and surviving family members currently receiving monthly benefits, just over 11 million still receive their checks by mail. As the approximately 3,500-square-mile Pine Ridge Reservation currently has no banking institutions in existence, this requirement may present an additional hardship for community elders, most of whom are members of the Oglala Sioux Tribe. “This requirement by the government shows that those in power are out of touch and will do things that prevent some from receiving benefits,” said Maria Birch, a reporter for Chamberlain’s Central Dakota Times. “How do you bank when there’s no bank around or folks that accept debit cards? Paperless does not work for everyone,” she said. With some of the nearest financial institutions located either in the urban area of Rapid City, which lies over 100 miles from Pine Ridge Village, the reservation’s largest residential district, or in the small town of Gordon, Neb., some 40 miles away from the reservation’s sparsely populated southern border, the tribe’s elders are still learning firsthand the ins and outs of the imposed Social Security benefits distribution system. Many residents of this vast reservation, particularly elders, lack the reliable transportation necessary to open off-reservation bank accounts. Additionally, many elders do not own or even have access to computers and the associated technology that would make online banking a possibly convenient reality for them. And some may not have the intergenerational desire to navigate such technology, even if it is readily available. Some reservation elders might simply feel more secure with a tangible paper check in hand and less burdened with only having to make arrangements for a single monthly trip to cash such a check rather than multiple trips to an ATM to withdraw funds. Though many banks now offer so-called free checking accounts, there are oftentimes hidden fees involved that unscrupulous bank employees might levy against unsuspecting elders. The Pine Ridge Reservation has a dearth of ATMs for cash access and, of the few available, less-than-moderate fees are generally charged, as well. An alternative to establishing a bank account is the use of a debit card. But debit cards oftentimes levy exorbitant fees, too. Social Security recipients who do not have a bank or credit union account or who prefer using a credit card account have the option of using the Direct Express Debit MasterCard, which the Treasury Department recommends. Since 2008, more than 1.5 million beneficiaries have signed up for Direct Express. “The fees may be higher than we would like, but they are a lot lower than those on cards issued by other providers,” said National Consumer Law Center Inc. attorney Margot Saunders in a May 2011 interview with The Wall Street Journal. NCLC is a nonprofit consumer advocacy organization headquartered in Boston. A proposed federal credit union provides a glimmer of hope for those without bank accounts, but it is expected to be centrally located in Kyle and may not be fully operational for another two to five months. There is also a tribal bank in the works, according to Warren Eagle, legislative aide for the OST council. Eagle said the council recently held a meeting to discuss the project. There is, however, an almost obscure clause within the rules governing the transition to a paperless Social Security benefits system that will allow recipients who live far from financial institutions to file a petition for exception from the direct deposit requisite, according to the Treasury Department’s Financial Management Service website. This may be the saving grace within this and other isolated Native American communities. Direct deposit of monthly social security funds works for community and tribal elder the Rev. Cecil Weston. “At my age I can’t do anything, so what I get, I’m satisfied,” the spry 79-year-old said with a chuckle. Weston banks in Gordon, which is about 35 miles from his home in Porcupine, and both he and his wife have been receiving paperless Social Security checks since 2000, when he retired from the ministry. The couple have their own vehicle and make the necessary banking trip across the border at least once a month. “I’ve never heard any complaints from others about the direct deposit system,” he said. Pine Ridge Reservation residents who are eligible for Social Security benefits must apply through the Rapid City office of the Social Security Administration, located at 605 Main St., Suite 201. The office assists tribal members with filing for Social Security in person and by phone and videoconferencing, which is referred to as Video Service Delivery. VSD systems are permanently stationed at Pine Ridge Hospital and at the Indian Health Service clinics in Kyle and Wanblee and are available to applicants every Monday, Tuesday, Thursday and Friday. Prior to filing a claim through the VSD system, an appointment must be made by calling the Rapid City SSA office, according to Kathy Petersen, public affairs specialist. A representative from the Rapid City office also travels to the reservation three times a month to assist VSD applicants. The SSA employee is available in Kyle on the first Wednesday of every month, Pine Ridge Village on the second Wednesday and Wanblee on the third Wednesday. Regular hours are from 1:00 p.m. to 3:00 p.m. MST. In addition, two representatives make the trip to Pine Ridge Village on the third Tuesday of each month, setting up shop in the gray trailer next to the Bureau of Indian Affairs building. They serve community and tribal members continuously from 10:00 a.m. to 2:00 p.m. “We can’t speak for individuals’ responses to using direct deposit,” said Petersen. “We don’t capture any of that type of information.” “But we do know that direct deposit is the safest and most reliable and most expedient method of payment for our clients,” she said. The Direct Express Debit MasterCard may be particularly advantageous to Pine Ridge Reservation beneficiaries, Petersen indicated. “It allows them to access their funds, and they can make purchases from participating merchants. They can pay their bills online with that card. They can get money back from a point-of-sale transaction where they’re buying something and they need some additional cash. And then they can also use an ATM, certain ATMs,” she said. In addition to direct deposit and debit card options, there is also an electronic transfer account option, said Petersen. When the Department of Treasury rules were implemented, requiring that all of the checks be directly deposited, the electronic transfer account also became an option, she said. An electronic transfer account is a low-cost account at a bank, credit union or savings and loan into which federal funds can be directly deposited and which has a maximum monthly account fee of $3, according to Petersen. Such an account can be offered with a lower monthly fee, she said, with the fee being set by each individual, federally insured financial institution. “(This is) great information to get out to the public because it’s not just Social Security, it’s (Veterans Affairs), it’s Railroad Board and if you’re a Civil Service retiree, if you worked for BIA … the direct deposit requirement is going to affect those checks, too,” Petersen said. “It’s any federal check, not just Social Security.” For further information, contact the Rapid City SSA office at (866) 964-7416 between the hours of 9 a.m. and 3:30 p.m. MST or visit www.socialsecurity.gov. (Contact Jesse Abernathy at staffwriter@nsweekly.com)
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