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KGA/KACS Info: Kentucky EBT

KGA/KACS Info: Kentucky EBT "Cash Back" Program

NOTE: information below is from March of 2008.

  1. What state benefits will be on the EBT card?
    1. The cash benefits that will be available on the Kentucky EBT card beginning in October are the KTAP benefits, which are also commonly called TANF benefits, and Kinship Care benefits. The state will also be applying WIN benefits at a later date.  All three cash benefit types are combined to comprise the total cash benefits available to the cardholder on the card.
  2. Will all TANF and other future disbursements be on EBT cards? Do clients have a choice between regular checks or the card?
    1. Clients will have a choice of either direct deposit or having the benefits put on the EBT card; however, checks may still be issued for special circumstances.
  3. What are TANF, Kinship Care benefits?
    1. TANF is Temporary Assistance for Needy Families (Example: people displaced because of a hurricane). K-Tap is the KY Transitional Assistance Program (people moving to KY because of a disaster). The Kinship Care program is an alternative to foster care for a child that is abused or neglected.
  4. If a TANF client happens to NOT be a food stamp client, will their card look or be different than the EBT food stamp card?
    1. The card will look exactly the same.
  1. Will WIC be on the card?
    1. No. The WIC and food stamp programs are separate. There is an upcoming Kentucky pilot program to move the WIC program to a separate electronic card-based program. Note: as of 2012, Kentucky now has a WIC EBT program operational statewide.
  1. Do I have to offer EBT cash back?
    1. No. This is a business decision and retailers may continue using state provided EBT equipment ONLY for Food Stamp EBT transactions with no EBT TANF or other cash back capability.
  1. I thought you could not receive cash back with Food Stamps?
    1. This is NOT a Food Stamp program. This is an additional “cash benefit account” added to Kentucky EBT cards for various “cash payment” programs previously dispersed to clients through paper checks.
  1. If we are not interested in offering cash back program and just want to continue accepting EBT Food Stamp purchases do we need to complete the survey sent from JPMEFS?
    1. If a retailer does not wish to participate they do not have to do anything. However, JPMEFS will be following up with retailers that do not respond in September. If retailers don't want to be called in September, they may call the 800 number and let them know they will continue to accept food stamps only.
  2. What equipment will retailers need in order to offer cash back?
    1. An “integrated” payments system with the cash register via a Third Party Processor (TPP), or separate Third Party Processor equipment is required.  A sampling of TPP’s was provided with the JPMEFS letter. Your local bank may also know of other TPP’s that operate in your area.
    2. State supplied “stand beside” equipment will not work with the new “cash back” system – state supplied EBT equipment will ONLY process EBT food stamp transactions.
  1. Do state TANF, Kinship Care, & WIN benefit checks have anything on them that would allow retailers to recognize the checks? The checks are from the Commonwealth of Kentucky, Department of Treasury, and are drawn on Farmer's Bank. 
    1. There really isn't any other identifying information. This is actually the way all state checks look, including state employee pay checks.
  2. Is there any information that might help retailers make a decision to participate in the EBT Cash Back program?
    1. If a retailer is cashing/receiving some of these state benefit program checks and is located in an area where there are not many state workers, there is a good chance that some of these checks are for cash benefits. One good indicator to use is the amount of food stamp customers they have. Approximately 12 to 15% of food stamp recipients would also get KTAP benefits. Therefore, say a store has 100 food stamp recipients shopping their store, there would be approximately 12 cash benefit customers among them. Since the average KTAP benefit is $239 a month, then the store would have potentially $2,868 in benefits that could be spent on any item in their store each month. If they decide not to accept EBT cash in their store, those benefits might be spent at a nearby competitor.
    2. As a suggestion, retailers may wish to contract with a TPP for one year for the cash benefits payment program. They will then clearly know what kind of volume they would have and if the volume doesn't justify the cost, then end the contract with the TPP and let JPMEFS know they want the free state equipment re-installed in their store for accepting food stamps only.
  3. Will there be additional fees associated with providing cash back?
    1. There “could” be additional merchant fees associated with offering the cash back program. Pricing for these cash back transactions are variable according to the individual TPP’s fee schedules which is negotiated between the merchant and the TPP.
    2. For transactions where there is a cash only withdrawal, the merchant will be reimbursed $0.30 cents for each transaction. This reimbursement will be made for each cash only withdrawal performed and will be reimbursed directly to the merchant’s bank account by the TPP on a monthly basis.  Depending upon the TPP fee schedule, this may or may not cover the retailers processing fees.
  1. Assuming a retailer is setup with a processor to accept EBT Food Stamp and TANF transactions via their properly integrated POS system, what happens if there is a “mixed” transaction – such as a food stamp client is using food stamp benefits from their account, yet there is a “cash” balance due and they want to use TANF funds to pay the remaining balance?
    1. This all depends on the processor's equipment, or the way the retailer has their POS set up.   For example, big chains may use their own POS equipment for these transactions and would follow their specific POS procedures - and are already doing so today for EBT cards with cash from other states.  For those retailers contracting to use a Third Party Processor's POS equipment, the TPP will provide instructions on how to handle such mixed transactions for their equipment.
  1. Is there a limit on how much cash back is allowed for each transaction or is there a monthly limit imposed by the state?
    1. The retailer is allowed to set their own limits on how much cash back they are willing to dispense.  Retailers may follow the same cash back policy they already have in place for debit cards.  There are no limits imposed by the state.  Retailers will receive $0.30 for every cash back transaction they perform.
  1. Assuming a retailer is setup with a processor to accept EBT Food Stamp and TANF transactions via their properly integrated POS system, what happens if there is a “mixed” transaction – such as a food stamp client is using food stamp benefits from their account, yet there is a “cash” balance due and they want to use TANF funds to pay the remaining balance?
    1. This all depends on the processor's equipment, or the way the retailer has their POS set up.   For example, big chains may use their own POS equipment for these transactions and would follow their specific POS procedures - and are already doing so today for EBT cards with cash from other states.  For those retailers contracting to use a Third Party Processor's POS equipment, the TPP will provide instructions on how to handle such mixed transactions for their equipment.
  1. Can EBT clients get cash from a bank ATM in my store?
    1. Yes, cash benefits can be obtained from ATM's providing the ATM accepts Quest® transactions.   If the ATM in a merchant's store does not accept Quest® transactions they can contact the owner/processor of the ATM and ask that they arrange to accept them.   ATMs that accept Quest® transactions should display the Quest logo on the ATM, but not all ATM owners are diligent at doing so.  JPMorgan is currently recruiting banks and ATM owners to accept EBT cash, however, unless the ATM is owned or processed by one of the larger banks or processors, JPMorgan may not be aware of the ATMs in all stores, therefore, unless the ATM currently displays the Quest® logo, it is best to be proactive and contact your ATM owner/processor and ask them to contact JPMorgan directly by calling 800-350-8533 for assistance with the certification process to accept Quest® transactions.
  1. If I limit the amount of cash I give back from a purchase, can EBT clients get the full amount on the card from an ATM in my store?
    1. Providing the ATM accepts Quest® transactions cardholders can get up to the amount of cash that the ATM allows or the amount available in their account, whichever is less.   Many ATMs have limits to the amount a cardholder can withdraw per transaction and/or per day. 
  1. Do EBT Clients have to buy something to get cash from the card?
    1. As long as the POS equipment that the retailer uses permits it, the cardholder can either get cash back with a purchase or a cash withdrawal without a purchase.   Retailers will receive $0.30 for every cash withdrawal transaction without a purchase, but not for cash back as part of a purchase transaction.  

 

You may call the JPMEFS “hotline” at 1-800-350-8533 with additional questions.

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