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rainbow4321 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-07-09 08:37 AM
Original message
Many jobless have to pay fees to get unemployment money
Edited on Sat Mar-07-09 08:42 AM by rainbow4321

http://www.dallasnews.com/sharedcontent/dws/bus/stories...

Thirty states, including Texas, have struck such deals with banks that include Citigroup Inc., Bank of America Corp., J.P. Morgan Chase and US Bancorp, an Associated Press review found.

For hundreds of thousands of workers losing their jobs during the recession, there's a new twist to their financial pain: Even when they're collecting unemployment benefits, they're paying the bank just to get the money or even to call customer service to complain about it.

Some banks, depending on the agreement negotiated with each state, also make money on the interest they earn after the state deposits the money and before it's spent. The banks and credit card companies also get roughly 1 percent to 3 percent off the top of each transaction made with the cards.

(snip)

In 2003, states paid only $4 million of unemployment insurance through debit cards. By 2007, it had ballooned to $2.8 billion, and by 2010 it will probably rise to $10.5 billion, according to a study by Mercator Advisory Group, a financial consulting firm.

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http://www.dallasnews.com/sharedcontent/dws/bus/stories...

The system has dizzying rules and isn't the easiest to navigate. After calling or filing online, a claimant must survive a review to determine if he's out of work "through no fault of his own," as the law requires. He then must search for a new job and report back biweekly about his finances and job search, using an automated phone tree.

Successful applicants receive a debit card issued by JPMorgan Chase & Co., the commission's vendor. Every two weeks, assuming claimants meet requirements, the state wires money to the bank, which electronically reloads the cards with cash.

Biweekly payouts range from $166 to $835, depending on past income. Usually, benefits last half a year, though some people may take up to 12 months to draw them. Also currently available are two extensions that Congress approved, of 13 weeks and seven weeks.

(snip)

Looming policy choices should keep Texas' program in the news. A year ago, Gov. Rick Perry temporarily suspended a portion of employers' tax payments, saving businesses $90 million but exacerbating what is expected to be a recession-driven plunge in the fund by fall. That'll force the commission to scare up some $750 million through higher taxes, bonds or borrowing.










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Gormy Cuss Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-07-09 08:51 AM
Response to Original message
1. As I wrote on an earlier thread, the states are saving money by shifting costs to recipients.
Unless recipients can opt to receive the benefits without additional fees, this privatization should be against the law.
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