EFT - Direct Deposit Overview

Policy

Senate Bill (SB) 962, which was signed into law September 28, 2000, mandates that counties who offer Direct Deposit to their employees must also offer Direct Deposit as an option to recipients who receive cash assistance payments. Recipients who choose Direct Deposit will receive their cash benefits through an EFT to their personal bank account instead of receiving a paper warrant or having their benefits issued through an electronic transmission to the EBT system.

Direct deposits are also available to vendors as an alternative method for receiving vendor payments. Vendors who prefer to have their payments electronically transferred to their financial institution, rather than receiving a warrant by mail, may elect to receive payments via an EFT.

Purpose

The purpose of Direct Deposit is to promote financial independence and self-sufficiency for clients. This is accomplished by offering more options for money management and encouraging clients to establish bank accounts. It also provides greater convenience for clients and vendors with existing bank accounts. Direct Deposit will also avoid mail delays and minimize lost or stolen checks.

Cash Assistance Programs

Cash assistance programs to be included in Direct Deposit are:

Note: For GA, only the personal needs portion of the grant may be paid in the form of Direct Deposit. However, if a Director’s Exception has been approved allowing the shelter portion of the GA grant to be paid directly to the client, both the personal needs portion and the shelter portion may be issued via Direct Deposit if the client chooses this issuance method.

Client/Vendor Enrollment

Direct Deposit is available to recipients of cash assistance and vendors who have a checking or savings account at a financial institution. Recipients and vendors may request to enroll or disenroll from Direct Deposit at any time. The Social Services Benefits Specialist (SSBS) must explain/offer Direct Deposit to clients at intake, Re-evaluation (RE), and when a change in payee occurs.

Definitions

The following definitions are used in reference to Direct Deposit:

Automated Clearing House (ACH)

A nationwide electronic funds transfer governed by the National Automated Clearing House Associated (NACHA) operating rules, which provide for interbank clearing of electronic payments for participating financial institutions.

Benefit Issuance Unit (BIU)

The Benefits Issuance Unit (BIU) administers the release and issuance of public assistance benefits through various methods, including checks, warrants, Electronic Funds Transfer (EFT), and Electronic Benefit Transfer (EBT). BI maintains direct deposit payment processes and coordinates with eligibility workers as required.

Direct Deposit

Direct Deposit refers to the electronic transfer of funds into a recipient or vendor’s bank account. The terms Direct Deposit and Electronic Funds Transfer (EFT) are interchangeable.

Electronic Funds Transfer (EFT)

Commonly referred to as Direct Deposit, EFT is the electronic transfer of the recipient or vendor’s payments directly into their bank account.

National Automated Clearing House Association (NACHA)

An organization that creates and enforces rules for the Automated Clearing House (ACH) network, which processes direct deposits and electronic payments. NACHA provides return codes that identify the reason a Direct Deposit is rejected.

Pre-Note Status

Indicates that the Direct Deposit request is pending verification by the financial institution.

Transmittal

The process of depositing funds into the client or vendor’s bank account. The transmittal occurs during the batch run after the electronic transmission cleared through the county’s disbursing bank and the ACH.

Direct Deposit Forms

The following forms are used for Direct Deposit for clients and vendors.

Usage

The Direct Deposit Enrollment Form (SCD 1948) is to be used as the client’s authorization to initiate Direct Deposit.

The Vendor Direct Deposit Enrollment Form (SCD 2640) is to be used as the vendor’s authorization to initiate Direct Deposit.

Completion

The SSBS completes the top portion of the SCD 1948/SCD 2640 form, which includes Case Name, Case Number, and SSBS Number.

The SCD 1948/SCD 2460 has four sections:

Section 1

The client/vendor must complete Section 1 of the SCD 1948/SCD 2640.

Section 2

Section 2 is to be completed by the bank representative only if the client/vendor requests Direct Deposit into a savings account.

Section 3

If the client/vendor requests Direct Deposit into a checking account, they must provide a “voided” check or a bank memo with the routing and account number preprinted.
If the client/vendor is unable to provide a “voided” check or a bank memo, then Section 2 must also be completed and signed by the bank representative.

Section 4

The client/vendor must sign and date the form. If there is a joint payee, they must also sign and date the form.

Scanning

A copy of the SCD 1948/SCD 2640 and a copy of the voided check or bank memo, if applicable, must be scanned into Imaging.

EFT Reports and Correspondence

Direct Deposit Production Reconciliation Report

This report is produced in the daily batch. It lists the contents of the Direct Deposit Bank File and includes:

Detailed EFTs by case number
Summary by aid code
EFT rejects and returns.

Notice to Participate – Direct Deposit Start (DDP-001)

This correspondence is automatically mailed to notify the client when Direct Deposit is approved. For vendors, this notice is not automatic and must be manually created in the Template Repository.