10.3.1 Electronic Funds Transfer Option

W-2 agencies should provide money management and banking information to W-2 Wisconsin Works participants and encourage participants to use EFT Electronic Funds Transfer of W-2 payments into a financial institution rather than receiving a check by mail to help:

Make payments more secure and timely;

Participants avoid expensive check cashing fees;

Decrease staff time dealing with phone calls, documentation, and affidavit forms associated with lost, stolen, or destroyed checks; and

Promote work readiness as many employers require paychecks be issued electronically.

Many financial institutions offer a no-fee, no-minimum-balance checking or savings account with EFT accounts.

Some participants may decline the EFT option because they are chronically overdrawn, owe fees from a negative account balance, or distrust financial institutions due to a negative interaction. The FEP should discuss various options with the participant, such as opening a limited account with a debit card only option that does not allow expenditures in excess of available funds.

Participants with credit problems may still have access to a checking or savings account through smaller community banks and credit unions as their lending policies are often more flexible.

Participants who have "non-fraudulent" activities reported on their ChexSystems report and have been denied access to a checking account in the past may benefit from participation in money management classes or a program designed to help repair their standing with banks. Agencies should assist participants in connecting with these community resources.

Some participants may choose to have their W-2 payment EFT deposited to a prepaid debit card. FEP Financial and Employment Planner s should explain that, in addition to the monthly fee, prepaid debit cards have many hidden or hard to find fees, including:

Initiation or activation fees;

Point of sale transaction fees;

Cash withdrawal fees;

Balance inquiry fees;

Customer service fees;

Bill payment fees;

Monthly fees;

Inactivity fees;

Paper statement fees;

Fees to add or “load” funds, etc.

If the participant chooses EFT, the FEP must alert the participant to the potential for possible fees charged by the financial institution. All prepaid debit cards must be included when counting assets for determining financial eligibility.

If a participant chooses to use EFT, and later requests to have the W-2 payment “held,” the FEP must end the EFT so that WWP Wisconsin Work Programs will issue the participant’s W-2 payment by check and the FEP can then put a hold on the check.

EXAMPLE : Mercedes tells her FEP that she plans to get a prepaid debit card so she can have electronic deposit of her W-2 payments because she has poor credit. Her FEP explains the fees prepaid credit cards come with and suggests that Mercedes open a checking account with a local credit union instead. Mercedes agrees and her FEP connects her with a local credit union that has a second chance checking account program, and helps Mercedes enroll in a money management workshop.

Wage Garnishment

Some participants may have a garnishment order for unpaid debts or child support. Per Wis. Stat. s. 49.96, W-2 payments cannot be garnished; however, financial institutions must honor court-ordered garnishment actions.

The FEP must provide this information to W-2 participants who choose EFT for their W-2 payments and should advise the participant to seek legal assistance if a financial institution garnishes their W-2 payments.