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Wisconsin Department of Children and Families Wisconsin Works (W-2) Manual |
agencies are encouraged to provide money management and banking information to W-2 participants and to promote EFT of W-2 payments into a financial institution rather than receiving the check by mail. Advantages of EFT include:
· Payments are more safe and timely.
· Avoids expensive check cashing fees.
· Many financial institutions offer a no-fee, no-minimum-balance checking or savings account with EFT accounts.
· Less staff time dealing with phone calls, documentation, completion and mailing of affidavit forms associated with lost, stolen, or destroyed checks.
· Promotes work readiness – many employers require that paychecks be issued electronically.
Some participants may decline the EFT option because they are chronically overdrawn and may owe fees associated with their negative balance. For these participants, money management workshops or classes may be appropriate.
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. Those 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 a program to repair their standing with banks. Agencies should assist participants in connecting with these community resources.
Some participants may have a prepaid debit card and use this option when electing EFT. Prepaid debit cards may offer advantages such as helping build good credit and providing an option to participants with bad credit. However, some prepaid card vendors may charge excessive fees. Fees are sometimes hidden or hard to find. In addition to the monthly fee, other fees may include: initiation or activation fees, point of sale transaction fees, cash withdrawal fees, balance inquiry fees, customer service fees, bill payment fees, and/or fees to add or “load” funds. 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 has selected EFT, and, at some point after requests to have the W-2 payment “held,” the FEP must end the EFT so that CARES 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 is planning on getting a prepaid debit card so she can have electronic deposit of her W-2 payments. The FEP advises Mercedes to be aware of fees when choosing a card, including possible monthly fees, customer service fees, inactivity fees, or paper statement fees. The FEP suggests that Mercedes compare a few cards before making her choice. When Mercedes opens a prepaid debit card, she must disclose this asset to the FEP. The FEP will need to enter the prepaid debit card information on the CWW Liquid Assets page and run eligibility.
Wage Garnishment
Some participants have a garnishment order for unpaid debts or child support. Per Wisconsin Statutes Section 49.96, W-2 payments cannot be garnished, however financial institutions must honor garnishment actions ordered by the court. Agencies must provide this information to W-2 participants who choose EFT of W-2 payments. If the financial institution garnishes the W-2 payments, the FEP should advise the participant to seek legal assistance to stop the garnishment.
History: Release 16-01; Release 11-05; Release 10-01.