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SUGGESTIONS
FOR ADVOCATES THROUGHOUT THE STATE
The State EBT Project has indicated
that working with recipient advocates has been, and will be, key to ensuring
the success of EBT implementation. However, your county may wait until
many important decisions have already been made to request your assistance
or may never contact you at all. Therefore, we encourage you to initiate
the conversation with your county welfare department (CWD) regarding this
important new system. Whether you have a lot of time or just a little
to dedicate to the successful transition to EBT in your county, your participation
is valuable to low-income families and individuals who rely upon cash
assistance and/or food stamp benefits. The following ideas may help you
to initiate a conversation about EBT with your county welfare department.
Call Your County EBT
Contact
- Each CWD has an EBT Contact
person. Call your CWD to find out who this person is. If you are unable
to locate an EBT Contact person for your county, contact the State EBT
Project.
- Call your County EBT Contact
and introduce yourself. State why you are interested in EBT. Explain
that you work with low-income populations who will be impacted by the
new system of delivering benefits and would like to be involved in the
EBT transition process.
- Confirm the information
you have, such as: Is it true that our county has(n't) chosen to use
EBT for cash benefits? Is it true that our county will roll out EBT
in [month, year]? (A county roll-out schedule is attached as Appendix
A.)
- Request a meeting with your
county welfare department and invite other advocates who serve low-income
people in your county.
Meet With Your County EBT Contact and Welfare Department
- Try to get your county welfare
department to meet with advocates and recipients on a regular basis
throughout the EBT transition process, starting at least several months
before the scheduled roll-out date in your county.
- Ask whether your county
is considering converting to EBT by mailing the cards to recipients
by or requiring them to come into county offices (over-the-counter conversion).
Let the county know which you think might be better for the people you
serve.
- If your county has a large
immigrant or homeless population, ask how your county is planning to
serve these recipients.
- If your county has chosen
to use cash EBT, ask how your county plans to gather community input
regarding the cash access plan to ensure that everyone will be served
by a nearby ATM or POS machine.
- If your county has chosen
to use cash EBT, ask whether the county is thinking about requesting
a countywide exemption from the three-day stagger for cash benefits
distribution (see pages 15 and 35-37 of the PDF version for this report).
- As you think of other questions,
remember that the county might not yet know the answers to your questions.
These are the most important to ask, as they may surface issues that
your county has not yet considered.
Work With Other Organizations
Serving the Poor
- Contact other advocates
who might also be interested in this topic and work with them to encourage
your county to include the community in the process of making decisions
concerning EBT.
- Talk to other organizations
and recipients in counties that have already rolled out EBT to learn
how the EBT transition process worked there.
- Include recipients by inviting
them to meetings and surveying them regarding some of the decisions
that your county will need to make.
Learn More About EBT
A list of EBT-related websites and contacts is included at page 84. Information
about EBT is also available through the State EBT Project website at www.ebtproject.ca.gov.
SECTION THREE: County Decisions
The State requires each county
to make several decisions before and during the transition to the EBT
system. Additionally, there are a number of other issues each county will
have to take into consideration for a successful EBT implementation. This
section addresses some of these decisions and issues.
A. Cash EBT
Counties must decide whether to distribute cash
assistance, in addition to food stamp benefits, through
EBT. The State required counties to make an initial
decision in August 2001.
B. Reviewing the Cash Access
Plan
Input should be provided to the State and Citicorp about
the proposed cash access plan for the county, if the
county has chosen to distribute cash benefits through EBT.
C. Conversion Process: "Mail-Based"
or
"Over-the-Counter"
Counties must decide whether to make the initial transition
to EBT by mail or over-the-counter at county benefits offices.
D. Ongoing Card Issuance
Counties must decide how to issue EBT cards to people
who re-apply, are newly eligible for benefits, or need a
replacement card after the initial EBT conversion.
E. Languages of Training
Materials
Counties must decide which languages to choose among
the Citicorp-prepared recipient training materials, and what
to do for recipients whose languages are not supported.
F. Other County Concerns
In addition to the decisions required by the State, counties
will have several other decisions about how best to serve
their clients with the EBT system.
CASH
EBT
Statewide
County
Decision
All counties must distribute food stamp benefits through the EBT system,
but each county has the choice of whether to also distribute cash assistance
payments through EBT or to continue sending out paper checks (warrants).
Initial county decisions have already been made. However, if your county
has not yet chosen to distribute cash benefits through EBT, there is the
possibility that the State may later allow them to do so. A county's later
decision to use cash EBT will probably mean that it will be able to add
cash EBT only after all California counties have rolled out.
Counties
Choosing Cash EBT
Thirty-seven California counties have, thus far, chosen to distribute
CalWORKs benefits through the EBT system and eleven counties have chosen
to use EBT for General Assistance (GA)/General Relief (GR) benefits. The
list of counties choosing to distribute cash benefits through EBT for
CalWORKs and GA/GR is attached as Appendix B. Updated lists can be found
on the State EBT Project website (www.ebtproject.ca.gov).
Counties choosing to distribute Cash Assistance Program for Immigrants
(CAPI) and/or Refugee Cash Assistance (RCA) payments through EBT are unknown
to advocates at this time.
Cash
Access Plans
Counties converting to cash EBT will be asked to provide input into the
development of county-specific cash access plans that will be prepared
by Citicorp for each cash EBT county. A cash access plan lists the ATM
and POS locations where recipients can access their cash benefits and
how much they may have to pay to do so. In order to ensure that recipients
can easily and affordably access their cash benefits in your county, it
will be imperative that your county's cash access plan include no-cost
and low-cost cash access locations. To learn more about the cash access
plan and how advocates can participate in the review and improvement process,
see page 20 of the PDF version for this report, "Reviewing the Cash
Access Plan."
Cash
Access Costs to Recipients
Certain costs to recipients are associated with the distribution of cash
benefits through the EBT system. Recipients may be subject to surcharges
and transaction fees (see pages 16-17 of the PDF version for this report).
How much or how little a recipient pays to access his or her cash benefits
will depend upon (a) the locations and policies of the ATM and POS machines
accepting EBT cards, and (b) the recipient's understanding of how surcharges
and transaction fees are incurred. It is possible that a recipient could
get all of his or her cash benefits without paying any transaction fees
or surcharges or that a recipient could pay a significant portion of his
or her benefits in transaction fees and surcharges (see pages 17-18 of
the PDF version for this report).
Case-by-Case Exemptions and Other Alternatives to Cash EBT
Recipients may request to be exempted from the cash EBT system for hardship
on a case-by-case basis. If granted an exemption, a recipient will continue
to receive a paper check each month. (See pages 35-37 of the PDF version
for this report to learn more about exemptions to cash EBT.) Most counties
are required by law to offer recipients the option to have their cash
benefits directly deposited into their personal bank accounts. The direct
deposit option may help reduce recipient costs of accessing benefits,
provides for greater privacy, and allows the recipient to receive cash
benefits on the first day of each month. Additionally, a recipient may
choose a person to act as his or her "Designated Alternate Cardholder
(DAC)." A DAC will receive an EBT card and PIN and will then have
access to all of the recipient's cash benefits. See page 41 of the PDF
version for this report for further discussion of "Additional Cardholders."
Three-Day
Cash Benefits Stagger
In counties that have chosen to use EBT for their cash aid recipients,
cash benefits will become available the first three calendar days of each
month. This is referred to as the "cash stagger." A recipient's
availability date will depend upon the last digit of his or her case number.
For further discussion of the cash stagger and exemptions to the cash
stagger for hardship, see pages 35-37of the PDF version for this report.
Countywide
Exemption to the Three-Day Cash Benefits Stagger
State law allows each county to request a waiver of the three-day cash
stagger for all of its CalWORKs recipients. (See Welfare & Institutions
Code section 10072(c); MPP 16-215.61.) If the State grants the exemption,
the county can then distribute cash benefits on the first day of the month,
instead of over the first three days of the month. For further information,
see page 35 of the PDF version for this report.
The pilot county of Yolo submitted
a written waiver request to the California Department of Social Services
for this exemption and was denied. However, state law does allow for it
and if advocates and a county welfare department feel that an exemption
would best serve the needs of their clients, then this exemption should
be requested.
Case-by-Case
Exemption to the Three-Day Cash Stagger
Recipients facing hardship due to the three-day cash stagger may request
to be exempted from the stagger on case-by-case basis. If the county welfare
department approves the request, the recipient will be able to access
all of his or her cash benefits on the first day of each month. (See Welfare
& Institutions Code sections 10072(c) & (l); MPP 16-215.62.) For
further discussion, see pages 35-37 of the PDF version for this report.
CAPI
and EBT
Due to the way the Cash Assistance Program for Immigrants (CAPI) is administered,
CAPI may not be included in the list of cash benefits distributed via
EBT, even if a county has chosen to use EBT for other cash benefits. See
page 49 of the PDF version for this report for more information about
CAPI and EBT.
Surcharges
A surcharge is a fee that EBT cardholders will pay at some ATM and POS
machines. Each ATM or POS machine owner has the option to provide EBT
cardholders with surcharge-free cash withdrawal services. POS machine
owners are not supposed to charge EBT cardholders more than they normally
charge other debit card users. Typical ATM surcharges are between $1 and
$2 per transaction. POS surcharges are usually lower, with the exception
of POS machines at check cashers.
Recipients can avoid paying
surcharges by withdrawing their cash benefits at surcharge-free ATMs or
POS machines. Some ATMs with no surcharge include those owned by Citibank,
California Federal Bank (Cal Fed), Washington Mutual Bank, and Axis ATMs
(found at most 7-Eleven convenience stores and Walgreens). Other large
banking institutions, such as Bank of America and Wells Fargo Bank, will
charge a surcharge for EBT cash withdrawals at their ATMs. The number
of surcharge-free ATMs are often limited in low-income neighborhoods -
leaving some zip codes without any surcharge-free ATMs.
Each machine is supposed to
notify the recipient if there will be a surcharge and how much the surcharge
will be. The recipient must be allowed to cancel the transaction if he
or she does not wish to pay the fee. This notice of the surcharge, however,
may not be very helpful for limited English proficient (LEP) recipients.
Federal law prohibits any
charges to recipients for using EBT for food stamp benefits.
Transaction Fees
A transaction fee is an $0.85 fee charged by Citicorp to a recipient who
makes more than four cash-only withdrawals (as opposed to cash-back with
a purchase) from his or her EBT cash account in a given month. After the
first four cash-only withdrawals (made at either POS machines or ATMs,
or a combination of both), recipients will pay an $0.85 transaction fee
for each subsequent cash-only withdrawal made at an ATM (but not at a
POS). This fee will be in addition to any surcharges. For example, after
making four cash-only withdrawals at ATMs and/or POS machines, if the
fifth cash-only withdrawal is made at a surcharging ATM, the recipient
could pay $2.35 for the transaction ($1.50 surcharge, plus $0.85 transaction
fee).
Recipients can avoid paying
transaction fees by withdrawing their cash at POS machines (although they
may have to pay a surcharge) or by withdrawing all of their cash in four
or fewer cash-only transactions per month. The State is developing a brochure
to provide information to recipients on how to avoid surcharges and transaction
fees. At the date of publication of this Guide, it had not been decided
whether this brochure would be translated. (See Appendix I for a copy
of the draft brochure.)
Recipients will also pay a
$0.25 "transaction fee" for each balance inquiry made at an
ATM. There are no free balance inquiries at ATMs. However, recipients
can call the toll-free Citicorp Helpline ARU to get their account balances
for free at any time, and balances should be printed on transaction receipts.
Federal law prohibits any
charges to recipients for using EBT for food stamp benefits.
Pilot Counties are Both Cash EBT Counties
Both EBT pilot counties, Alameda and Yolo, distribute cash benefits through
the EBT system. Although cash EBT seems to be successful for the majority
of recipients in the pilot counties, some potential problems with the
distribution of cash benefits through EBT are worth noting.
- Homebound recipients must
depend on others to access their cash benefits, leaving them vulnerable
to theft and abuse;
- Limited English Proficient
(LEP) recipients may find it difficult or impossible to find an ATM
or POS machine that can serve them in their own language;
- While recipients may select
direct deposit, or may request an exemption from cash EBT for hardship
(like those mentioned above), it has not proven easy for recipients
in Alameda County to do so, as not all caseworkers are aware of the
exemption process (see pages 33-34 of the PDF version for this report
to learn more about exemptions to cash EBT);
- The three-day stagger of
cash benefits causes hardship for some recipients and learning about
or receiving an exemption from the stagger has proven difficult for
some recipients in Alameda County (see pages 15 and 35-37 of the PDF
version for this report to learn more about exemptions to the cash stagger);
- EBT account balances are
not available at all ATMs and some recipients have reported not receiving
a transaction receipt at some ATMs or a balance listed on their POS
cash receipts;
- Some neighborhoods have
no free ATM access to cash benefits and/or very limited surcharge access;
and
- During the first two months
of EBT in the pilot counties, some recipients were paying a substantial
portion of their benefits for surcharges and transaction fees.
ATM Fees Paid by Recipients in Alameda County
According to the State and County EBT Project Teams, an average of $3.46
was paid in combined surcharges and transaction fees by those recipients
who used ATMs to access their cash benefits or make balance inquiries
in the month of September 2002 (the second month after EBT roll-out).
Alameda County's cash recipient caseload for September was approximately
17,700. Of this caseload, approximately 10,250 cases paid ATM fees and
approximately 7,450 paid no ATM fees at all. The total ATM fees paid by
recipients in the month of September was approximately $35,500. Over $71,000
was paid by recipients in Alameda County for the combined months of August
and September. At this level of fees and surcharges, recipients in Alameda
County will pay well in excess of $400,000 per year in fees to commercial
institutions.
The State has tracked those
recipients in the pilot counties who paid over $7.50 in fees per month.
The numbers available for these recipients are combined for both Yolo
and Alameda Counties. The total number of households that paid over $7.50
in both counties is 363. Of the data available, it appears that one household
(of those paying over $7.50) paid $7.60 per month. At the other extreme,
another household paid $44.55 per month of their household benefits to
access their cash benefits. The average paid over the two month period
by the 363 households paying over $7.50 per month is $12.92 per month.
County welfare departments in the pilot counties will be contacting these
363 households to inform them of ways to reduce their costs in accessing
benefits.
The above amounts paid by households
do not include POS charges. In Alameda County, advocates were told that
these fees are so small as to be inconsequential and that fees paid at
POS locations are often included in the purchase amount and therefore
cannot be detected. It is unknown how much is being paid at POS locations,
but these charges could be significant in counties such as Los Angeles,
where recipients rely more on check cashers. There is evidence that many
check cashers will charge 1% to recipients who use their services to access
cash benefits. While this 1% fee is less than what check cashers now normally
charge to cash recipients' benefits checks, with EBT it will be significantly
more than the fees paid by recipients who can rely on ATMs or non-check
casher POS machines to access their cash benefits.
Suggestions for Advocates
- Find out whether your county
has opted for cash EBT or is considering it for the future. See Appendix
B for a list of cash EBT counties as of October 2002.
- Ask to be involved in the
review of the template and draft cash access plans for your county.
For further information, see page 20 of the PDF version for this report,
"Reviewing the Cash Access Plan."
- Give your county suggestions
of cash access locations in areas where many recipients live and potential
"hidden" cash access locations so that these locations may
be solicited to sign-up to accept EBT.
- Ask your county to request
that the bank it does business with waive EBT surcharges.
- Advocates can also directly
ask local banks to accept EBT cards and to waive surcharges for EBT.
- If your county is one of
the majority of counties that offers direct deposit for cash benefits,
ask your county to publicize this option and its benefits to recipients.
- Ask your county how it plans
to let recipients know about seeking an exemption from, or "opting
out" of, cash EBT for hardship, signing up for direct deposit,
and/or receiving an exemption from the three-day cash stagger.
- Discuss with your county
the option of requesting a countywide waiver to the three-day cash benefits
stagger.
- Find out what will happen
for CAPI recipients in your county. Will they be converting to cash
EBT or not?
Ask your county to monitor excessive fees paid at ATMs and POS machines
and to have a plan for educating clients about how to minimize their
costs to access their cash benefits (the threshold for contacting clients
in Alameda County is $7.50 paid in fees per month).
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