News

Some Minnesota child support recipients opt for prepaid card

August 17, 2003

MINNEAPOLIS, Minn. -- About 7,000 Minnesota recipients of child support payments have elected to have their monthly payments credited to a Visa-branded debit card, called the ReliaCard, issued by U.S. Bank, according to a report on KARE TV.

Minnesota is among a handful of states that are swapping paper checks for child support payments distributed by electronic transfers.

Response has been strong since the state began encouraging the switch in February. So far, 48,000 families -- nearly half the total of child support recipients -- have signed up for the program, with most choosing to have their checks deposited directly into checking accounts rather than credited to the ReliaCard.

State officials say the cards come with monthly statements that can help parents track spending and manage money. The card can be used to withdraw cash from ATMs or make purchases at point-of-sale terminals. Recipients pay a convenience fee to use the card at ATMs.

While it functions like a debit card, the ReliaCard is not connected to a checking or savings account.

The state issues more than 180,000 checks each month, collecting and distributing about $46 million in child support payments. Switching to electronic benefits will lower the administrative costs of producing and mailing checks.

U.S. Bank has helped state governments in Colorado and Washington implement similar programs and is working with other government agencies to initiate stored value payment cards in more states and in various capacities, according to a U.S. Bank news release.

(See related story Colorado child support recipients can access payments at ATMs)