For decades, Rhode Islanders who receive unemployment or temporary disability insurance benefits have gotten checks in the mail. But while the system works well for most, some checks do get lost – and in the event of an emergency, it might be hard to cash them.
In the wake of Hurricane Katrina, where the latter proved true, officials at the R.I. Department of Labor and Training decided it was time to act on an idea they’d been considering for some time.
Unemployment and TDI are going electronic.
Starting in April, unemployment benefits recipients will be issued debit cards that will be electronically loaded with their benefits and can be used like regular Visa debit/ATM cards. Rhode Island will be the first state in New England and the ninth in the nation to do this.
Come September, TDI benefits will also be paid out through this system.
At a news conference to announce the change, Adelita S. Orefice, the state director of labor and training, held up a paper check and said:
“These are useless in a disaster.” Having seen what happened elsewhere, she added, “We didn’t want to see Rhode Islanders one blizzard away” from the same misfortune.
The deal is expected to save the state $500,000 per year, Orefice said. And the new cards will also reduce errors. “We have a 95.5-percent success rate with paper checks,” she said. “But the 4.5 percent we miss are real people. These people are trying to put food on the table.”
To issue and manage the roughly 50,000 cards that will be needed each year, the state has made a deal with JPMorgan Chase, which runs similar programs in Arizona, Louisiana and New York. JPMorgan Chase has also provided debit card services to more than 13 million participants in public benefit programs domestically and internationally.
As part of the deal with JPMorgan Chase, beneficiaries will be able to make one free cash withdrawal, each time their benefits are paid, at ATMs run by The Washington Trust Co., Allpoint and Chase. Additional withdrawals and point-of-sale transactions in which the card is used as a debit card, not as a Visa, will cost 25 cents each.
Those fees are much lower, Orefice noted, than the typical cost of cashing a check when you don’t have a bank account – and more than 40 percent of beneficiaries are believed not to have checking accounts.
Those who do can have their benefits deposited directly in their accounts as well.
