Unemployment Benefits Will Soon Be Distributed On Debit Cards

Newly unemployed Wisconsin residents will soon be able to receive their unemployment benefits with a bank-issued debit card.

The practice has been used in other states with mixed results.

Starting Thursday, the Department of Workforce Development (DWD) will begin phasing out the practice of printing and mailing people checks for their unemployment benefits. Workers just entering the unemployment system will have the option of direct deposit or a debit card.

DWD spokesman John Dipko says more than 40 other states already use debit cards for unemployment benefits and doing it here will make Wisconsin’s system run more efficiently.

He says people can use the debit cards at stores without fees. They can also make withdrawals at more than 1,400 U.S. Bank or MoneyPass ATMs without fees. They’d get one free monthly debit card transaction at an ATM outside of that network. After that, they would pay fees.

Maurice Emsellem with the National Employment Law Project says in some states, using debit cards has worked well. In other states, hidden bank fees pile up.

“It’s very important to hold their feet to the fire – both the banks and the states – to make sure they keep those promises, that in fact it’s saving the state money and that in fact the banks are not making a lot of money off a lot of unemployed people,” says Emsellem.

In Wisconsin, residents currently receiving checks for their unemployment benefits will still be able to do so until their benefits run out. That applies to more than half of the roughly 84,000 total people who are on unemployment right now.