South Carolina Unemployment Benefits Will Transition To Debit Cards

July 16, 2010

Those who are unemployed in South Carolina will see a change in their unemployment benefits come Monday. According to WCBD News 2, the S.C. Department of Employment and Workforce will begin phasing out paper checks and will replace them with Visa debit cards. Because the old process required the department to process and print checks, which resulted in bank processing fees, the new process is expected to save more than $4 million a year, reported Clark Newsom, a spokesperson for the Department of Employment and Workforce. The department printed and mailed more than 100,000 checks just last week.

Unemployment recipients also have the option of direct deposit if they do not want to receive a debit card.

Charleston Regional Business Journal reported that the department wants to make the process easier for individuals. It has been testing the new debit card program in three areas for the last two months. "These new methods of delivering unemployment benefits are part of a conscious effort to streamline our service delivery system in a more efficient and cost effective manner. The use of debit cards and direct deposit offers a faster and more secure option for claimants and helps them avoid check cashing fees," said Executive Director John L. Finan. New claimants will be the first to receive the debit card and the department hopes to complete the transition by October 1.

The department has partnered with Bank of America Merrill Lynch and Visa. South Carolina unemployment claimants will be presented with the Visa debit card option when applying for unemployment insurance benefits. Once a claimant is determined eligible, payments will be deposited directly to their debit card account and recipients will have the option of withdrawing money from any ATM or bank accepting Visa cards or using it to make purchases anywhere Visa debit is accepted. While there is no fee to receive the card, fees may apply for certain transactions. Information on these fees will be sent to the recipient along with the card.

The transition to debit cards is expected to also benefit the employment department. According to WSPA News Channel 7, the department experienced several problems with the old system, including errors that caused the agency to send out duplicate checks on two separate occasions last year. "It will take away a lot of these factors that have been problems in the past," said Newsom.

WSPA News Channel 7 also reported that S.C. Department of Social Services moved to Electronic Benefits Transfer (EBT) cards in 1995 to replace food stamps, which saved the state close to $25 million over a nine-year period. The Department of Employment and Workforce hopes to see similar results.

Compiled by Heidi M. Agustin