Gov. Heineman Highlights New Efficiency & Better Service Provided by Department of Labor
Unemployment Benefits Now Paid Electronically in Nebraska
Gov. Dave Heineman outlined new steps being used by Department of Labor (DOL) in issuing unemployment insurance benefits that are providing improved efficiency and security to Nebraska workers.
Earlier this year, DOL began transitioning those who receive benefits from a paper check that was being mailed to individuals each month to a system where users could choose to have their unemployment benefits deposited directly into bank accounts or added to a debit card.
"Our strategy for implementing technology involves both opportunities to help cut costs and eliminate red tape, while delivering services that benefit Nebraskans," Gov. Heineman said. "Having a government that operates efficiently, effectively, openly, and in a more responsible manner to the citizens of this state is important and I commend everyone involved with this project for helping move Nebraska forward in this arena."
Nebraska was the first state to launch both the direct deposit and debit card options for individuals receiving unemployment benefits. In April, DOL began implementing electronic payments for new applicants to the unemployment program who qualified to receive benefits. The option to choose an electronic payment method was marketed to users during the summer, and by September nearly all payments were being processed electronically.
Since April, more than 96,000 electronic payments have been processed totaling $20 million in benefits. The switch is expected to save at least $300,000 in operational costs annually.
Unemployment benefits are processed via an electronic funds transfers (EFTs), similar to the process used for distributing child support payments. For those opting to receive benefits on a debit card the process is similar to those who receive food stamp stipends. Currently, 54 percent of eligible workers receiving unemployment benefits use direct deposit with 46 percent preferring the debit card.
Commissioner of Labor Fernando Lecuona III said, "By providing the option of using a debit card or direct deposit to distribute unemployment insurance benefits, we are providing faster, safer and more convenient access to the funds individuals and families need. Using technology to streamline the payment process has virtually eliminated the need to print and mail paper checks each month."
While the new EFT system has created cost-savings for the state by eliminating the cost of printing, mailing and replacing checks, it also provides advantages for workers, including: providing quick, reliable access to payments without the need to deposit a check, payments are available the same day of their deposit, and giving added safety and reliability to workers by eliminating the possibility of lost or stolen checks.