Thursday, May 13, 2010

on the subject of debit cards for social assistance recipients

I heard on the local news that the province of Manitoba is apparently seriously considering giving welfare people debit cards instead of giving them cheques. While I applaud the creativity, There are a number of reasons I don't think its feasible.

First, the premise being that you can monitor what welfare abusers are spending their money on. They're going to go to the first machine and withdraw cash, then go spend it on food and alcohol. Of course not all of them, some people have legitimate need of a social safety net, but c'mon i'm talking about welfare abusers. Then they're going to lose their card or have it stolen. Then you have to replace it every 7 days because this keeps happening. I wonder if these would have no withdrawal fees as well? Province swallows the cost? Or do they legislate the banks have to?

Not to mention the poor bastard who gets stuck behind some solvent/alcohol/drug abusing welfare bum trying to remember his pin number at the machine/store.

I mean, maybe people lose their cheques often enough that there is no real cost difference. I dunno. Maybe the people who sign the cheques just don't want to get carpal-tunnel syndrome. Maybe the government of Manitoba has realized that all banks moved out of the inner city years ago.


Brian said...

There are challenges to moving to debit cards, but I'm not sure you're weighing all the advantages on the other side.

For example, imagine how much cash gets sucked out of the system as a result of the recipients cashing cheques in downtown Winnipeg's half-dozen or so payday loan outlets. Debit cards would end that practice.

This is another case where we're only catching up to the rest of the world - since social assistance has been delivered through swipe cards elsewhere for at least a half-decade or more.

reedsolomon.matr1x at said...

I did think of that, but there is already a cap regulated by the government on how much those outlets can charge, anyways. Will there be similar caps on debit card fees? I remain skeptical.