By Raphael Michilis
Georgia Public Policy Foundation (GPPF), a free-market think tank based in Atlanta, has called on the state government to adopt prepaid cards as the primary method for the payment of unemployment benefits, where paper cheques and direct deposit into a bank account are the only ways to receive the benefit.
The foundation argued that the migration would benefit both beneficiaries and taxpayers.
“Georgia allows state employees and people receiving child support to accept payments on a prepaid card. It’s time to expand access. In a state where so many are without a bank account and the unemployment rate is 9.1%, we should strive to deliver services in a way that doesn’t needlessly burden those most impacted by the recent recession and weak economic recovery,” Kelly McCutchen GPPF president and CEO, said in an article published on The Atlanta Journal-Constitution on May 9.
According to McCutchen, 12.2% of the Georgian population is unbanked. More than 9% of Georgia’s almost 10m inhabitants are unemployed and the Government has just approved a cut in the unemployment benefit from 26 to 14 weeks.
He argued that the government and taxpayers would also gain benefits from the migration to prepaid cards thanks to the reduction of costs and inefficiencies related to issuing paper unemployment cheques.
Other states that have moved to prepaid card benefit payments, such as Mississipi, have seen such gains already, said McCutchen.
“The cost of issuing paper cheques compared with the cost of depositing money on a prepaid card is approximately $1 versus 10 cents”, he said.
“Ninety percent of Mississippi residents receiving unemployment benefits [on prepaid cards] were able to access the funds at least two days earlier than if they had been paid by cheque. They also no longer had to pay cheque-cashing fees or worry about carrying cash around,” added McCutchen.
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