What is an Electronic Benefits Transfer?

An electronic benefits transfer (EBT) is a method of distributing certain types of U.S. government benefits to low-income households. Food stamps and cash benefits are the most common types of federal benefits for which an electronic benefits transfer is typically used. Generally, the funds are deposited into individual accounts, and then retrieved by the beneficiaries using a debit card. At one time, people had to deal with actual stamps, coupons, checks, and other various forms of paper. Now a single card can be used to access different benefits.

Currently known as the Supplemental Nutrition Assistance Program (SNAP), food stamp benefits can be used to purchase specific food items. Until the late 1990s, most food stamps were actually made of paper. Now the benefits are usually distributed by electronic benefits transfer, in the form of a plastic debit card. The cards can be swiped at store keypads where credit and debit cards are accepted. Like other such cards, they usually include an individual personal identification number (PIN). One of the more recent developments in the program is that EBT is now accepted as payment at most farmer's markets, presumably increasing access to a wider variety of highly nutritional food.

Electronic benefits transfer also can be used to distribute cash benefits. Created in 1996, Temporary Assistance for Needy Families (TANF) is one example of a federal cash assistance program. The money is awarded as block grants to individual states, which then create and administer their own benefits programs according to federal guidelines. The U.S. Office of Refugee Resettlement also awards refugee benefits that include refugee cash assistance (RCA). These funds can usually be accessed with EBT cards as well.

The electronic benefits transfer system has appeared to streamline the process of distributing government assistance, by reducing administrative paperwork. Paying for purchases with EBT cards, rather than stamps or coupons, also may allow for more efficient retail transactions. Another potential benefit of the electronic benefits transfer system is that it can help preserve the dignity of welfare recipients. Before EBT cards became available, food stamps and welfare checks were often easily recognizable as a tool of only low-income people. Today, EBT cards look like other credit or debit cards, so the stigma of receiving government assistance may be somewhat reduced.

Welfare policies and programs are usually determined on a state-by-state basis. Then, food and cash benefits are generally distributed monthly by state agencies. The exact date can vary by state. Agencies typically contract with outside companies that provide the EBT services. People who think they may be eligible for benefits, and wish to learn more about electronic benefits transfer programs, should contact their local social services offices for more information.