Finance
August 8, 2014

Creating Efficiencies and Reducing Costs

Provincial Government Increases Use of Direct Deposit for Payments

In an effort to process payments in a more cost-effective manner and to reduce the costs associated with cheque processing, the Provincial Government will increase its use of direct deposit and will phase out government-issued cheques by December 31, 2016.

“Direct deposit is a secure, reliable and cost-effective way to deliver payments, and we see more examples of governments, business and individuals moving away from traditional forms of payment and instead using electronic payments. Our government is increasing its use of electronic payments, an initiative which is expected to save approximately $500,000 annually once fully implemented.”
- The Honourable Charlene Johnson, Minister of Finance and President of Treasury Board

The Provincial Government issues approximately 565,000 cheques annually. Increasing the use of direct deposit will contribute significant savings through the reduction in the use of paper and related cheque-printing and delivery costs. The current cost to produce a cheque is approximately 95 cents, while a direct deposit payment costs about five cents.

The move to electronic payments will be a phased-in process, and a number of departments have already implemented direct deposit. The Income Support for long term clients and the Home Heating Rebate Program account for approximately 313,000 or 55 per cent of all government cheques. Together, these programs are currently issuing approximately 50 per cent of their payments via direct deposit.

Businesses and individuals currently receiving cheques have until December 31, 2016 to register to receive payments by direct deposit. Direct deposit enrolment forms can be obtained from the Department of Finance website or from the department responsible for the payment. For any new payment, the only payment method offered will be direct deposit.

To enroll for direct deposit, please visit www.gov.nl.ca/fin or call 1-888-729-6199.

QUICK FACTS

• The Provincial Government will increase its use of direct deposit and will phase out government issued cheques by December 31, 2016.
• The Provincial Government issues approximately 565,000 cheques annually. Increasing the use of direct deposit will contribute significant savings through the reduction in the use of paper and related cheque-printing and delivery costs. The current cost to produce a cheque is approximately 95 cents, while a direct deposit payment costs about five cents.
• Direct deposit enrolment forms can be obtained from the Department of Finance website or from the department responsible for the payment.

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Media contacts: Tansy Mundon Director of Communications Department of Finance 709-729-6830, 693-1865 tansymundon@gov.nl.ca

2014 08 08         9:50 a.m.