The Illinois Department of Human Services selected Affiliated Computer Services Inc. to issue electronic payment cards (EPCs) to individuals who provide childcare and personal assistance to the disabled in their homes. According to the IDHS, the EPC service will be available to approximately 80,000 caregivers in Illinois. It is scheduled to go live Oct. 1, 2009.
Carol Adams, Secretary at IDHS, said the program will cut governmental costs of dispersing paper checks to recipients. She estimates the service will save IDHS $230,500 annually. But she stresses that the main value of the solution will be in giving caregivers quicker, more convenient and less costly access to their monthly pay.
"The main objective is to speed up delivery of monthly payments," she said. "It helps people have immediate access. We have consumers that have concerns about their mail. It creates problems for them, worried about the security of their funds. So I think this is an easier and certainly a less expensive way for them to access their funds, particularly for people who don't have checking accounts."
Unbanked cardholders will no longer have to pay check cashing businesses to get their funds, she said. IDHS believes the 50,000 child care providers will reap $5.5 million a year in savings; for the remaining 30,000 personal assistants, a total collective savings could be as much as $10.5 million annually.
Additionally, cardholders are not charged maintenance or other fees for using the reloadable MasterCard Worldwide-branded prepaid cards, Adams said.
ACS runs 24 EPC programs serving 4 million consumers nationwide and administers Illinois' child support payments program. Dave Turner, Vice President of State and Local Solutions at ACS, said the EPC program will streamline the funds disbursement process, with recipients receiving payments electronically on the day they are issued.
"But if it were to be put in the mail on a Monday, it might not show up in their mailbox until Wednesday or Thursday," he said. "They're working late on Friday. They might not be able to get to the bank or, God forbid, have to go to a check casher. We're talking about easily a seven day improvement on getting access to those funds."
Cardholders are also afforded the protections of Regulation E, part of the Electronic Fund Transfer Act of 1978.
"If there is an improper transaction or unauthorized transaction, these people can get their money back, whereas taking cash before, they didn't have any recourse," Turner said.
The program is also designed to increase consumers' financial literacy. Bryan Thomas, Project Manager at IDHS, said the EPC solution will help educate the unbanked population in Illinois on the benefits of electronic banking and payments. The marketing campaign the IDHS is initiating before the Oct. 1 launch includes posters and brochures enclosed with mailed checks, he said.
The EPC program pays day care facilities as well as individual family members who provide childcare for services rendered, Adams said. It also funds the work of personal assistants, whom Adams defined as caregivers who help out individuals in various ways.
"They may provide them assistance of even getting up in the morning," she said.
"Some of them do housekeeping duties - the kind of things that enable them to stay in their homes as opposed to having to move to some other kind of facility."
As the U.S. population continues to rise and individuals live longer, thereby increasing the stress on child and health care providers, the need for additional support workers will increase as well, Adams said. Therefore, she believes that child care providers and personal assistants are growth areas for electronic payments.
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