Public Assistance Going Plastic Benefits Will Be On Debit Cards; Officials Hope To Cut Fraud

Coming soon: public assistance on plastic.

Washington officials are polishing plans to issue welfare benefits via magnetized debit cards, a move proponents say will save money and reduce fraud.

“Plastic works for the rest of America, so it works for me,” said John “Buckeye” Smith, a Spokane food stamp recipient.

Idaho state officials launched a similar pilot project on Labor Day, setting up accounts for thousands of families receiving food stamps or cash assistance.

At least 200,000 Washington households will get the cards when the project starts in June 1999. A pilot program is planned in southwest Washington next May.

Kathleen Brockman, the Washington state official coordinating the project, envisions a card similar to those issued by banks.

The cards will be accepted by any retailer on the Quest network, a financial exchange system already used by card-using welfare systems in New York and Colorado.

Idaho and Washington cards would work across state lines because of a reciprocal agreement.

“I really believe it will be very beneficial for clients,” said Brockman.

Welfare officials hope the cards kill the sale of bootleg food stamps. Today, coupons can be sold on the black market for 50 cents on the dollar.

Colorado welfare officials handed out 125,000 debit cards last year and found food stamp fraud had declined, said Mark Tandberg, director of the program there.

Washington officials are consulting with the Food Retailers Association to ensure wide acceptance in businesses.

Employees at the Browne’s Addition Rosauers supermarket spend about 20 minutes a day sorting food stamps, said manager Bob Bowman.

“It’ll probably be quicker,” he said of the welfare cards, “but until I see it, I don’t know.”

The move is prompted by the federal government. In sweeping welfare reforms last year, Congress required all states to switch to “electronic benefits transfer,” eliminating food stamps entirely, by 2002.

Washington legislators set aside $6.86 million to go paperless.

Brockman expects the debit card system to save money in the long term.

Kristin Valenzuela, a 26-year-old single mother of three from Caldwell, Idaho, is participating in that state’s pilot program. She said the cards aren’t convenient yet, but will be soon.

“I think I’ll like it better, but it’s a sort of a hassle,” she said. “I went to a couple of places and they weren’t on computer yet. Now we have to go to certain banks and certain grocery stores where we can get our cash money.”

Officials expect debit cards to reduce the stigma of public assistance.

Food stamp recipient Smith left the Browne’s Addition Rosauers with a sack of groceries Thursday. He said he gets “funny looks” from checkers and shoppers when he pulls out a roll of coupons.

“I buy a six-pack, they look at me like I’m stealing from my kids,” Smith said. “It’s none of their business.”

Brockman expects the new system will improve some recipients’ money-management skills.

Now, the moth-eaten credit of many poor people keeps them from having a bank account, forcing them to check-cashing businesses that charge up to 15 percent, she said.

The new cards allow cash to be pulled from ATM machines.

“This will really help clients transition into the business world,” said Brockman.

, DataTimes MEMO: This sidebar appeared with the story: HOW IT WORKS The bank-styled cards will be accepted by any retailer on the Quest network, a financial exchange system already used by card-using welfare systems in New York and Colorado. Idaho and Washington cards would work across state lines because of a reciprocal pact. Proponents say the cards will save money and reduce fraud.

The following fields overflowed: BYLINE = Jonathan Martin Staff writer Staff writer Craig Welch contributed to this story.