Electronic benefits transfer (EBT) is a relatively new, mandatory method of delivery
for food stamps. Some states also opt to use EBT to deliver state funded and administrated
benefits, such as general assistance and TANF (temporary assistance for needy
families). This new delivery method affects the ten percent of all food stamp
recipients in the United States who are elderly, including the twenty percent
of food stamp households with elderly members. EBT also affects elderly recipients
of state administered cash benefits and general assistance.
EBT recipients use a card similar to a debit card linked to a checking account
to access benefits. Recipients are issued an EBT card and a secret personal identification
number (PIN). This card is not linked to a personal account, but rather recipients
have limited access to an allotted benefit award amount from the state’s
account. To access food stamps at USDA authorized access points, including grocery
stores, convenience stores, some farmers’ markets, route vendors and group
living facilities, recipients simply “swipe” the EBT card through
a point-of-sale (POS) device, much like a debit card. To access cash benefits,
recipient can withdraw money from an ATM, receive cash back with a purchase, or
use the EBT at a POS to pay directly for goods. Most EBT recipients encounter
fees to access EBT cash benefits that were not incurred under the former paper
check delivery method. There are usually two separate charges to access EBT funds
at an ATM (and sometimes at a POS)- first, a fee per transaction by the company
with whom the state contracts to administer the EBT program (usually $0.80) and
second, a surcharge imposed per transaction by the owner/operator of the ATM or
POS device (usually $1.50). These charges effectively reduce recipients’
need-based award by imposing costs to access those very benefits. In the majority
of states, EBT is the mandatory delivery format for all cash assistance benefits,
which means that recipients have no alternative to incurring these charges.
Special Access Concern for Elderly Recipients
Some elderly recipients may encounter difficulties mastering the new EBT technology
and may be unable independently to access cash benefits or to fulfill their basic
shopping needs using EBT. In many states, elderly or disabled recipients who have
difficulty with EBT must assign an alternative payee or authorized representative
to assist in navigating the system. The alternative payee has access to the recipient’s
benefits and is expected to act on behalf of the recipient.
This alternative payee system leaves elderly and disabled recipients dependent
upon a third party, unreasonably limiting the recipients autonomy and independence.
The recipient must rely upon the alternative payee, not only to assist in accessing
the benefits, but to do so honestly and without great expense. Some recipients
must pay a fee to a third party performing this service, and in some parts of
the country there is a thriving business of individuals and agencies that sell
this service to persons who cannot otherwise find someone to fill this role. This
practice may also open the door to potential fraud by the alternative payee and
a loss of benefits for the recipient.
Consumers Union, Electronic Benefit Transfer (EBT) Programs: Best Practices to
Serve Recipients (August 2000).
Consumers Union, An Advocate’s Guide to Electronic Benefit Transfer (EBT)
in California (November 2002).
National Consumer Law Center, Consumer
Banking and Payments Law (2nd ed. 2002).
USDA, Food and Nutrition Service.
and NCLC