New Electronic Benefit Options Score High in Michigan on First Day

The state of Michigan has joined a trend, developing for the past couple of years, toward replacing paper benefit checks with electronic payment. The state on Tuesday announced it has started offering debit cards and direct-deposit options to citizens eligible to receive unemployment benefits. Michigan's Unemployment Insurance Agency (UIA), which last year issued almost 3.4 million unemployment checks, has not yet worked out how many recipients will opt for either electronic option and how many will prefer to stick with checks, says a spokesman for the Department of Labor and Economic Growth, of which the agency is a part. But if one day's experience is any indication, the electronic options should prove popular. The spokesman says nearly two-thirds of recipients who filed on Monday, the first day the new options were available, chose either direct deposit via the automated clearing house network or debit cards. Forty-four percent opted for direct deposit, while 21% chose cards, he says. “Our ultimate plan is to phase out checks,” he adds. Cost is a prime reason states are turning to electronic methods. Michigan expects to save $1.6 million annually in postage and paper costs if it can move its unemployment program completely to debit cards and direct deposit, though the spokesman says it is unclear whether this calculation includes any fees to JPMorgan Chase & Co., which is handling the program and issuing the cards for the state. “The debit card and direct deposit options will be faster and more secure and cost-efficient than the current practice of mailing paper checks,” says Chris Peretto, acting UIA director, in a statement. The cards, branded with Visa, can be used anywhere Visa debit is accepted and to withdraw cash from ATMs. Funds will be credited to the cards or to bank accounts within two or three days after unemployed workers certify their eligibility with the agency. Michigan is the seventh state for which Chase has introduced debit cards to distribute unemployment benefits, joining Arizona, Colorado, Louisiana, New York, Rhode Island, and Texas. In addition, the bank issues debit cards for child support in Arizona and Louisiana, as well as in 13 other states.