On Monday, Assemblyman Thurston “Smitty” Smith” introduced a bill that is aimed to help fix how Californians receive unemployment benefits.
AB 8 offers claimants the right to choose direct deposit instead of relying on debit cards to receive benefits.
The Bill was introduced after Bank of American estimated that fraud in California unemployed benefits system could cost $2 billion and identified 640,000 accounts with suspicious activity. They added that accounts should be investigated to determine if they should be shutdown.
According to the LA Times, 76,000 benefits cards were sent to people in states that do not border California, as well as multiple cards being sent to the same address.
AB 8, as introduced, Smith. Unemployment benefits: direct deposit.
Existing law provides for unemployment compensation benefits to eligible persons who are unemployed through no fault of their own. These provisions are generally administered by the Employment Development Department. Existing law requires unemployment compensation benefits that are directly deposited to an account of the recipient’s choice to be deposited to a qualifying account. Existing law defines “qualifying account” for these purposes to mean a demand deposit or savings account at an insured financial institution in the name of the person entitled to receipt of public assistance payments or a prepaid card account that meets certain requirements, including that the prepaid card account may not be attached to any credit or overdraft feature that is automatically repaid from the account after delivery of the payment.
This bill would, by July 1, 2021, provide that the recipient of the unemployment compensation benefits has the right to choose whether the benefits payments are directly deposited into a qualifying account or applied to a prepaid debit card.
This bill would declare that it is to take effect immediately as an urgency statute.
