The 47-year-old Holladay man tries to avoid the fee by asking for cash back at grocery checkstands. But cashiers have limited change on hand, and he needs his money in one lump sum to pay rent. One withdrawal per month adds up to an $18 annual loss, "the price of a pack of diapers," said Black, who is disabled and supports a wife and two sons, ages 4 and 17.
The practice of charging the most impoverished Americans to access their welfare benefits has been hotly criticized in neighboring states. The Denver Post recently reported the financial services company that administers Colorado's benefits charges 85 cents per ATM transaction and collected more than $1.8 million in the past two years. The money is passed along to banks and other owners of ATMs.
Utah's welfare recipients have it easier. The state pays for them to have up to three free ATM transactions a month. But, as Black illustrates, they are subject to the $1.50 to $2 charges imposed by most banks on non-customers.
And Workforce Services officials don't know how often people exceed the three-transaction limit. Nor can they say how many transactions taxpayers are footing - critical information, according to advocates for the poor who say it's high time that the state rethink the debit card model.
"People should have options for how they want to handle their money, and if an ATM is the only option, that's not much of an option," said Karen Silver of Salt Lake Community Action Program.
Utah started delivering welfare and food stamps via debit, or "electronic benefits transfer," cards in 2003. The state contracts with eFunds, a financial services company in Scottsdale, Ariz., to administer the cards. The five-year contract runs through 2008 and is worth $7.3 million, said Workforce Services spokesman Curt Stewart. "It's a good deal - a whole lot cheaper than mailing out checks." The cards work like any debit card and require PINs, which helps guard against fraud. Users benefit by "avoiding the stigma of counting food stamps," said Stewart.
On any given month, there are about 56,684 Utah households on food stamps and 10,000 on some type of financial assistance.
Most recipients access their cash benefits at grocery stores. Of the 558,522 transactions logged in 2005, only 161,581 - or 29 percent - were done at an ATM, according to Workforce Services data.
But there's no knowing how many clients paid for those transactions because eFunds won't disclose how much, if anything, it collected in fees. The company levies 50 cents on the fourth and all subsequent monthly transactions.
eFunds vice president for government solutions Cheryl Campbell said she can't disclose fee amounts because she doesn't have the data. "Under our contract with the state, we didn't set it up to create separate accounting for that," said Campbell.
A spokesman for the company, Chris Walker, said retrieving the information, "isn't impossible. But it's virtually impossible. It would take quite a scrubbing."
Some states will deposit welfare "checks" directly into a personal bank account, an option that Silver wants Utah to consider. In 2001, the state proposed polling clients to test their appetite for direct deposit, said Silver. "It hasn't happened. Frankly, I think, Workforce Services dropped the ball."
Black likes the idea, but says a history of bounced checks puts him out of the running for a checking account at most banks. "Yet somehow I qualified for a credit card," said Black. "One way or another, they figure out a way to take your money." kstewart@sltrib.com
