Michigan's Unemployment Insurance Agency on June 2 began offering direct
deposit and debit cards for unemployment benefits.

Until now, the state offered only checks, says Norm Isotalo, an agency spokesperson.

Unemployed workers who already receive benefits and those signing up for them can choose to receive their funds through either electronic-payment option or by check.

Sixty-six percent of unemployed workers who signed up for benefits June 2 chose an
electronic-payment option over checks, says Isotalo.

The state added electronic payments to decrease costs and to increase the speed of
disbursing funds, says Isotalo.

The state issued 3.4 million unemployment checks in 2007. "With that number in mind, we are estimating these new electronic options will save $1.6 million annually in postage and paper  costs," Isotalo says.

New York-based JPMorgan Chase & Co. is issuing the Visa debit cards, known as
Michigan UI cards, for the agency.

"The ultimate objective is to phase out the issuance of checks," says Isotalo. He predicts the agency will remove checks as payment  options for unemployment benefits "sooner than later."

Michigan UI cardholders can use the cards at ATMs or at the point of sale. Two ATM
withdrawals per benefit funds deposit are free from Chase or Allpoint Network ATMs, and all point-of-sale transactions are free. Cardholders can receive cash-back at the
point of sale for no additional charge

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