Unemployment benefits complete switch to direct deposit, debit cards

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CHICAGO — Beginning Nov. 1, all unemployment insurance payments are now made either by direct deposit or debit card, according to Maureen O’Donnell, director of the Illinois Department of Employment Security. Traditional paper checks no longer will be available. The modernization program was first announced in July.

The transition will make payments more secure, more timely, and easier to use. Claimants who initially sought benefits after July 31 will not be affected because they chose to use direct deposit or a debit card. Claimants who sought payments prior to July 31 and chose to receive a paper check are encouraged to use direct deposit. If direct deposit is not selected, claimants will be issued a debit card. IDES has offered direct deposit and debit cards since 2006.

“It is crucial that unemployment insurance be paid quickly, safely and efficiently,” O’Donnell said. “Eliminating paper checks makes the system more secure and is another way we can be respectful of everyone’s time and resources.”

There are no fees associated with receiving payments through direct deposit. Further, there are no fees associated with the debit card when used with more than 4,998 Illinois banks that accept Visa. Thousands more merchants and point-of-service counters in Illinois and across the country also accept Visa, including banks, drugstores and grocery stores. People also can get cash back after qualifying purchases. The Visa debit card is issued through Illinois National Bank.

Fees likely will be assessed when using out-of-network ATM machines or at merchants that do not accept Visa.

“We realize some workers are more comfortable with a check in their hands,” O’Donnell said. “We also are confident that those same workers will quickly come to appreciate the convenience and security of direct deposit and debit cards.”

Nationally, debit and credit card transactions more than doubled, from 25.3 billion to 50.8 billion, between 2000 and 2006. In that same time, debit card usage increased more than 200 percent. According to the American Bankers Association, more people today use credit or debit cards than cash.

The Illinois Department of Employment Security administers employment services and unemployment insurance through nearly 60 offices, including the Illinois workNet Centers, formerly known as the Illinois Employment and Training Centers. IDES also receives federal grants to provide and analyze labor market statistics and information.