Electronic benefit transfer

Last updated

EBT cards from several states EBT cards from several states.jpg
EBT cards from several states

Electronic benefit transfer (EBT) is an electronic system that allows state welfare departments to issue benefits via a magnetically encoded payment card used in the United States. It reached nationwide operations in 2004. The average monthly EBT payout is $230 per participant as of 2022. [1]

Contents

Benefits provided via EBT are of two types: food and cash. Food benefits are federally authorized benefits that can be used only to purchase food and non-alcoholic beverages. Food benefits are distributed through the Supplemental Nutrition Assistance Program (SNAP), formerly the Food Stamp Program. Cash benefits include state general assistance, Temporary Assistance for Needy Families (TANF) benefits, and refugee benefits.

Usage

Through EBT, a recipient uses their EBT card at participating retailers to purchase food items authorized by the USDA's SNAP program. Cash benefits may be used to purchase any item at a participating retailer, as well as to obtain cash-back or make a cash withdrawal from a participating ATM.

State agencies work with contractors to procure their own EBT systems for delivery of SNAP and other state-administered benefit programs. In the United States, all SNAP benefits are now being issued via EBT.

For example, recipients apply for their benefits in the usual way, by filling out a form at their local food stamp office or online. Once eligibility and level of benefits have been determined, information is transferred to the state's EBT contractor. Once they are approved for benefits, an account is established in the recipient's name, and their SNAP benefits are deposited electronically in this account each month. A plastic debit card is issued and a personal identification number (PIN) is assigned or chosen by the recipient to control access to their account.

All states have systems that use magnetic stripe cards and "on-line" authorization of transactions. When paying for groceries, the SNAP customer's card is run through an electronic reader or a point of sale terminal (POS), and the recipient enters the PIN to access the food stamp account. Then, electronically, the processor verifies the PIN and the account balance, and sends an authorization or denial back to the retailer. The recipient's account is then debited for the amount of the purchase, and the retailer's account is credited. No physical money changes hands. Payment is made to the retailer through an ACH settlement process at the end of the business day. Most states' online EBT systems are interoperable through the Quest network, which is sponsored by the Electronic Benefits and Services Council (formerly the EBT Council) of NACHA.

Many states stagger the issuing of benefits to EBT SNAP accounts, with the particular day of the month determined for each recipient based on the case number, Social Security number, or date of birth. The states of Alaska, Idaho, Nevada, North Dakota, Oklahoma, Vermont, along with Guam and the US Virgin Islands, credit accounts on the first of the month to all recipients, New Hampshire credits on the 5th, and South Dakota on the 10th. [2]

For most of its history, the Food Stamp Program used paper denominated stamps or coupons worth US$1 (brown), $5 (blue), and $10 (green). In the late 1990s, the food-stamp program was revamped, and stamps were phased out in favor of a specialized debit-card system known as electronic benefit transfer (EBT) provided by private contractors. Many states merged the use of the EBT card for public-assistance welfare programs as well. The 2008 farm bill renamed the Food Stamp Program as the Supplemental Nutrition Assistance Program (as of October 2008), and replaced all references to "stamp" or "coupon" in federal law to "card" or "EBT." [3]

Taxation

It is illegal for anyone to charge sales tax, surcharges or card processing fees from an EBT SNAP account, according to federal law and USDA SNAP Guidelines. New state and federal law grants new provisions to law enforcement and state agencies to investigate the criminal use, including taxation on EBT purchases, of state and federal benefits. [4]

Related Research Articles

<span class="mw-page-title-main">Debit card</span> Card used for financial transactions, usually without a credit line

A debit card, also known as a check card or bank card, is a payment card that can be used in place of cash to make purchases. The card usually consists of the bank's name, a card number, the cardholder's name, and an expiration date, on either the front or the back. Many of the new cards now have a chip on them, which allows people to use their card by touch (contactless), or by inserting the card and keying in a PIN as with swiping the magnetic stripe. These are similar to a credit card, but unlike a credit card, the money for the purchase must be in the cardholder's bank account at the time of the purchase and is immediately transferred directly from that account to the merchant's account to pay for the purchase.

<span class="mw-page-title-main">Supplemental Nutrition Assistance Program</span> United States government food assistance program

In the United States, the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, is a federal government program that provides food-purchasing assistance for low- and no-income people to help them maintain adequate nutrition and health. It is a federal aid program administered by the U.S. Department of Agriculture (USDA) under the Food and Nutrition Service (FNS), though benefits are distributed by specific departments of U.S. states.

<span class="mw-page-title-main">Food and Nutrition Service</span> U.S. federal anti-hunger agency

The Food and Nutrition Service (FNS) is an agency of the United States Department of Agriculture (USDA). The FNS is the federal agency responsible for administering the nation’s domestic nutrition assistance programs. The service helps to address the issue of hunger in the United States.

<span class="mw-page-title-main">WIC</span> U.S. federal government program providing food assistance for low-income women and children

The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) is an American federal assistance program of the Food and Nutrition Service (FNS) of the United States Department of Agriculture (USDA) for healthcare and nutrition of low-income pregnant women, breastfeeding women, and children under the age of five as part of child nutrition programs. Their mission is to be a partner with other services that are key to childhood and family well-being. WIC serves 53 percent of all infants born in the United States.

<span class="mw-page-title-main">Food policy</span> Area of public policy

Food policy is the area of public policy concerning how food is produced, processed, distributed, purchased, or provided. Food policies are designed to influence the operation of the food and agriculture system balanced with ensuring human health needs. This often includes decision-making around production and processing techniques, marketing, availability, utilization, and consumption of food, in the interest of meeting or furthering social objectives. Food policy can be promulgated on any level, from local to global, and by a government agency, business, or organization. Food policymakers engage in activities such as regulation of food-related industries, establishing eligibility standards for food assistance programs for the poor, ensuring safety of the food supply, food labeling, and even the qualifications of a product to be considered organic.

Merchant services is a broad category of financial services intended for use by businesses. In its most specific use, it usually refers to merchant processing services that enables a business to accept a transaction payment through a secure (encrypted) channel using the customer's credit card or debit card or NFC/RFID enabled device. More generally, the term may include:

Nutrition Assistance for Puerto Rico (NAP) —Spanish: Programa de Asistencia Nutricional (PAN) popularly known in Puerto Rico as Cupones — is a federal assistance nutritional program provided by the United States Department of Agriculture (USDA) solely to Puerto Rico. In 2021, over $2 billion USD was appropriated as a block grant for NAP to assist over 1 million impoverished residents of Puerto Rico. It is based on, though not part of, the USDA's national Supplemental Nutrition Assistance Program (SNAP) which in 2018 provided $64 billion in nutritional assistance to 42 million people in the 50 U.S. states, D.C., Guam and the US Virgin Islands.

The Inventory Information Approval System, or IIAS, is a point-of-sale technology used by retailers that accept FSA debit cards, which are issued for use with medical flexible spending accounts (FSAs), health reimbursement accounts (HRAs), and some health savings accounts (HSAs) in the United States.

<span class="mw-page-title-main">Food stamp challenge</span>

A food stamp challenge or SNAP challenge is a trend in the United States popularized by politicians, religious groups, community activists and food pantries, in which a family of means chooses to purchase food using only the monetary equivalent of what a family that size would receive in the US federal government Supplemental Nutrition Assistance Program (SNAP), colloquially called food stamps. In 2015, this amounted to US$194.00 per person per month, or $6.37 per day.

The Lone Star Card is an Electronic Benefit Transfer pin-based card. The card is used for Food Stamp and Temporary Assistance for Needy Families programs for the State of Texas, United States of America. When the program was implemented in 1995 the system became and still remains the largest EBT system in the United States of America. However this distinction is shared with New York state, alternating the position year to year.

<span class="mw-page-title-main">Social programs in the United States</span> Overview of social programs in the United States of America

The United States spends approximately $2.3 trillion dollars on federal and state social programs include cash assistance, health insurance, food assistance, housing subsidies, energy and utilities subsidies, and education and childcare assistance. Similar benefits are sometimes provided by the private sector either through policy mandates or on a voluntary basis. Employer-sponsored health insurance is an example of this.

The Temporary Emergency Food Assistance Program (TEFAP) is a program that evolved out of surplus commodity donation efforts begun by the USDA in late 1981 to dispose of surplus foods held by the Commodity Credit Corporation (CCC). This program was explicitly authorized by the Congress in 1983 when funding was provided to assist states with the costs involved in storing and distributing the commodities. The program originally was entitled the Temporary Emergency Food Assistance Program when authorized under the Temporary Emergency Food Assistance Act of 1983. The program is now known as The Emergency Food Assistance Program (TEFAP).

The Food Distribution Program on Indian Reservations (FDPIR) allows Indian Tribal Organizations (ITOs) to operate a food distribution program as an alternative to the Food Stamp Program for those living on or near an Indian reservation. The Food and Nutrition Service (FNS), an agency of the U.S. Department of Agriculture, administers FDPIR at the Federal level, and is locally operated through ITOs or State agencies(SAs). Eligibility for benefits is similar to the food stamp (SNAP) program, and funds are drawn from food stamp appropriations. Food Distribution Program Nutrition Education (FDPIR) grants are also awarded to participating FDPIR ITOs. These grants are awarded to support nutrition education activities that are culturally relevant, promoting healthy food choices, and promoting physical activity among participants.

Harvard Law defines poverty law as, "the legal statutes, regulations and cases that apply particularly to the financially poor in his or her day to day life". In a commonsense understanding and in practice, the goal of poverty law is to protect the disadvantaged poor from unfair treatment by the law. Poverty law often overlaps with federal benefits and welfare policies. Pertinent federal government benefits include Medicaid; cash public assistance ; and the Supplemental Nutrition Assistance Program (SNAP) program, previously known as the food stamps program. Poverty law frequently involves questions of administrative law, civil rights law, constitutional law, employment law, and health law.

The Double Value Coupon Program, also known as DVCP, is one of three initiatives that are part of Wholesome Wave’s Nourishing Neighborhoods program. The program aims to provide under-served communities with fresh fruits and vegetables by allowing consumers to double the value of federal nutrition benefits from Supplemental Nutrition Assistance Program and Women, Infant and Children (WIC) funding when used at participating farmers’ markets.

<span class="mw-page-title-main">Farmers' Market Nutrition Program / Senior Farmers' Market Nutrition Program</span>

The Farmers' Market Nutrition Program (FMNP) is a federal assistance program in the United States associated with the Special Supplemental Nutrition Program for Women, Infants and Children that provides fresh, unprepared, locally grown fruits and vegetables and nutrition education to WIC participants. Women, infants and children that have been certified to receive WIC program benefits or who are on a waiting list for WIC certification are eligible to participate in the FMNP.

Florida Certified Organic Growers and Consumers, also known as Florida Organic Growers or FOG, is a non-profit organization founded in 1987. It is classified as a 501(c) corporation. One of the main facets of FOG is Quality Certification Services, a program that extends through 30 states and 14 countries. FOG is also concerned with community outreach and education in order to promote healthy organic lifestyles and social equity.

The Big River Economic and Agricultural Development Alliance, most commonly referred to as BREADA, is a non-profit organization with headquarters in Baton Rouge, Louisiana. BREADA is the parent organization of the Red Stick Farmers Market and the Main Street Market.

<span class="mw-page-title-main">CalFresh</span>

CalFresh is the California implementation of the federal Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp program, which provides financial assistance for purchasing food to low-income California residents.

This article is intended to give an overview of the welfare system in the U.S. State of New York.

References

  1. "Supplemental Nutrition Assistance Program (SNAP)". United States Department of Agriculture (USDA). November 15, 2015. Retrieved February 27, 2015.
  2. "SNAP Monthly Benefit Issuance Schedule". Fns.usda.gov. April 16, 2010. Retrieved September 27, 2010.
  3. "Supplemental Nutrition Assistance Program: 2008 Farm Bill" (November 30, 2011). United States Department of Agriculture.
  4. USDA Retailer Training Guide PDF File