Electronic Benefit Transfer

ELECTRONIC
BENEFIT
TRANSFER

A new system for distribution of food stamps
and possibly cash benefits

Information Packet
April 2001

ELECTRONIC BENEFIT
TRANSFER
A new system for distribution of food stamps
and possibly cash benefits

• What is EBT?

  EBT stands for Electronic Benefit Transfer. It is the new method being used
  to deliver food stamp benefits. In some counties, it will also be used to
  deliver CalWORKs, General Assistance/Relief and Refugee Cash Assistance to
  people receiving public assistance benefits.

• How does it work?

  People receiving food stamp benefits will no longer receive food stamp coupons
  every month. Instead, they will use a plastic debit-like card and a personal
  identification number (PIN) to access their benefits and pay for their groceries,
  or to access their cash benefits (in those counties which choose EBT for cash
  benefits).

• Why the change?

  EBT is part of the 1996 federal welfare reform. The federal government decided
  that food stamp coupons are too expensive to manufacture, distribute, and
  destroy. They also believed moving to an electronic system would reduce fraud.
  All states are required to change to EBT by October 2002. Although food stamp
  benefits must be converted to EBT, in California, each county has the choice
  whether to also distribute cash benefits through the EBT card.

• Who will run the EBT system?

  The State will hire a private vendor to provide the electronic delivery of
  Food Stamp Program benefits and cash benefits. Citicorp Services, Inc. is
  the likely vendor to implement EBT in California. They have over half the
  state EBT contracts nationwide.

• What’s happening in other
  states?

  As of October 2000, 40 states (and the California counties of San Diego and
  San Bernardino) have started using EBT to distribute food stamp benefits.
  Most of these states are using EBT for both food stamp and cash benefits distribution.

• When does it start in California?

  EBT will be rolling out in groups of counties over the next two to four years.
  Alameda County is the pilot county for California. Alameda will start using
  EBT cards around the middle of next year (2002). Each county will have many
  important decisions to make before EBT is rolled out. The first (and perhaps
  the biggest) decision counties will have to make is whether to include cash
  benefits on the EBT card. This decision will be made by each county within
  the next several weeks.

• Which counties will also
  use EBT for cash benefits?
  
  The State is giving each county the option of also distributing CalWORKs,
  GA/GR, and/or Refugee Cash Assistance benefits through the EBT card. Each
  county will soon be told how much it will cost them to use EBT for cash benefits.
  Each county will then have twelve weeks to make their decision and get back
  to the State.

  If advocates and recipients wish
  to have a say in their county’s decision about putting cash benefits on
  the EBT card, then they need to act now. Please see the suggestions under
  "What can I do?" below.

• What are some of the advantages
  and disadvantages of putting cash benefits on EBT?

  Please see the attached table of "Cash EBT Advantages and Disadvantages."

• What other decisions will
  counties have to make?
  • After the cash decision,
    counties will have to make several other decisions. These decisions must
    be made by each county about ten months prior to EBT rolling out in the
    given county.

  • For a list of the county decisions,
    please see the attached "County Decisions for EBT" and the "EBT
    County Options" table distributed by the State.

• What can I do?
  

• Become informed and learn more
  about EBT.
  
• Tell other people and organizations
  about EBT.
  
• Work with others to influence
  your county’s decisions.
  
• Call your county’s EBT Primary
  County Contact person and tell him or her that you want to have a say in
  your county’s decision-making process.

For more information about the
provisions of EBT or to find out who your EBT Primary County Contact is, call
Debra Garcia of Consumers Union at (415) 431-6747 or email at GarcDe@consumer.org.

ELECTRONIC
BENEFIT TRANSFER

CASH EBT
AND OTHER
COUNTY DECISIONS

April
2001

CASH
EBT FEATURES

County Decision

Each county must decide within the first half of 2001 whether to distribute
CalWORKs and/or General Assistance/Relief benefits through the Electronic Benefit
Transfer (EBT) system. Recipients in counties choosing cash EBT will use an
EBT card similar to a debit card to access their cash benefits. Under EBT, the
State will hire a private vendor to run the system.

Access to Cash Benefits

• The EBT system must provide "a
  reasonable distribution of cash access locations that are free of any fee
  to recipients."
  
• The vendor must enter into an
  agreement with a major regional network of ATMs for recipients to access their
  benefits. This access is not guaranteed to be surcharge-free.
  
• CalWORKs benefit availability
  to the recipient will be staggered over the first three calendar days of the
  month. General Assistance/Relief benefit availability must be staggered for
  at least three calendar days of the month, but the County may choose a longer
  period.

Fees

• Recipients will have four cash
  withdrawals without a fee from the vendor.
  
• The EBT system must provide a
  "reasonable distribution" of cash access locations that are free
  of any fee to recipients. At other locations, the ATM or POS owner may charge
  a fee.
  
• Retailers may charge a fee for
  purchases or purchases with cash back only if the retailer customarily charges
  other debit card users.

Amount of Withdrawals

• Recipients will be able to make
  a withdrawal of at least $200 per transaction.
  
• Full withdrawal of cash benefits
  in one transaction is not guaranteed, but it may be provided. There may be
  a surcharge.
  
• Retailers may limit the amount
  of cash back with a purchase.

Cash Access Plan

• The vendor must prepare a Cash
  Access Plan for every county that chooses EBT for cash benefits.
  
• The vendor is required to "work
  closely" with the State and County Welfare Departments to develop the
  cash access plans.
  
• The vendor and County Welfare
  Departments are expected to consult with community organizations.
  
• Non-traditional cash access locations
  such as utility companies, housing authority offices and other community locations
  may be a part of the plan.
• The vendor must provide the State
  with a County Cash Access Plan for each county choosing cash EBT five months
  before the county is scheduled to convert to EBT.

Lost or Stolen Cards

• A 24-hour hotline will be available
  to report lost or stolen cards.
  
• Recipients will be fully liable
  for benefits stolen using their card and PIN until the card is reported lost
  or stolen. Recipients will not have the same protections bank card users have.
  
• A lost or stolen card will be
  replaced within three business days after reporting.

Keeping Track of Balances

• A recipient’s balance should
  be printed on each transaction receipt.
  
• Balances can be checked by phone
  at no charge.
  
• Balances can be checked at ATMs
  with a possible surcharge.
  
• No monthly statements will be
  issued. The cardholder can call the hotline to get the past ten transactions
  by phone or to request a mailed two month transaction history.

Unknowns

• Where will recipients be able
  to withdraw their cash benefits?
  
• Will a recipient be able to withdraw
  the full amount of their cash benefits at one time?
  
• How effective will community
  input be in influencing the locations for no-fee cash withdrawals?

For further information on the
provisions of EBT, please call Debra Garcia at Consumers Union at (415) 431-6747
or e-mail at GarcDe@consumer.org.

CASH
EBT

COUNTY DECISIONS FOR EBT

Individual California counties have
many options that affect the transition to this new means of food stamp and
possibly cash assistance benefit delivery.

The following serve as brief examples
of some the decisions that counties will make and therefore are areas in which
advocates and recipients might influence the EBT system.

County Decisions about Food Stamp
Implementation

• Will recipients receive their
  new cards, PINs, and all training information by mail or will any of these
  steps occur in person at designated locations?

• If the county chooses to mail
  out the cards, there will be walk-in training centers. Where will they be
  located? How many will there be?

• If cards are issued in person,
  where will this take place – at a central county office, district offices
  or at other locations?

• If a recipient loses a card,
  will he or she receive a replacement by mail (which can take three business
  days) or immediately at a county office?

• In which languages will training
  materials be provided?

• Which community-based organizations
  will receive free training about EBT?

County Decisions about Cash Benefit Implementation

Unlike food stamps where the transition
to EBT is federally mandated, California counties have to chose whether or not
recipients will receive their cash benefits on this same card. If a county chooses
cash EBT, many of the decisions that counties make regarding the transition
of food stamps coupons are the same for cash. In addition to the questions listed
above under food stamp implementation, there are some other county options for
cash:

• Will the county choose to distribute
  cash benefits through EBT?

• Which cash benefits will be distributed
  by EBT? CalWORKs, GA/GR and/or Refugee Cash Assistance?

The county and the state will
work closely with the vendor to decide another key issue:

• Where will recipients be able
  to access their cash benefits free of charge?

For further information on the
provisions of EBT, please call Debra Garcia at Consumers Union at (415) 431-6747
or e-mail at GarcDe@consumer.org

The following table provides
a list of the high level options as described in the EBT ITP that each county
has in regards to the implementation of EBT.

updated 3/6/01