Monica Yant Kinney: Hidden cost of unemployment benefits

In my nightmares about being laid off, I'm usually coming unhinged - panicking about paying the mortgage, rationing food, selling cherished belongings on Craigslist.

Steve Lippe is a calm, cool sort. After getting sacked, he had the presence of mind to read the fine print about the fees associated with his new Pennsylvania unemployment debit card.

Yes, fees. Fees to withdraw unemployment benefits. Fees to transfer. Fees to learn that besides being out of work, you're broke.

Lippe may work in business-to-business sales, but the guy has a nose for news.

"Who," he asked, "is making all this money off the unemployed?"

Excellent question. Timely, too.

Employers eliminated 598,000 jobs in January - the most firings in a month since 1974.

Nationwide, the unemployment rate just hit 7.6 percent. That's 11.6 million people without jobs - 434,000 of them in Pennsylvania.

The state did away with unemployment checks in 2007 in a move to put money into needy hands faster and save taxpayers $2 million a year in postage and processing.

Now the unemployed receive a Comerica Bank MasterCard debit card with the Pennsylvania logo.

The info packet has a picture of fireworks exploding over the capitol. In bold print, there's a suggestion: Enjoy the benefits!

"Yay," Lippe, 51, deadpanned as we sat at his kitchen table in West Philadelphia. "I'm having a great time."

Jobbing the jobless?

The unemployment debit card touts one free withdrawal per month at Wachovia or PNC Bank.

Bank elsewhere or more often, and you'll pay $1.50 for the privilege of getting your money. Maybe more, depending on "surcharges."

Lippe didn't want cash. Like most people, he needed to pay bills.

"You may transfer deposits from your debit-card account to your checking account," the rules instruct. "There is a $1.50 fee each time you use this option."

The "fee table" also explained that the unemployed will pay 40 cents to check their balance and, after one freebie, 50 cents if the card is denied while the carrier tries to make a withdrawal or purchase.

Lose the card and you'll get a new one free. Lose the replacement and it will cost you $4 - $12 if you want it quickly.

Get a job and forget about your unemployment account? Wait too long and you'll be charged $1 a month for not using the card.

Currently, 54 percent of the state's unemployed receive benefits via direct deposit - which requires applicants to fill out additional paperwork and wait several weeks. The rest stick with the debit card.

David Smith at the Pennsylvania Department of Labor and Industry downplayed the fees as being standard in the world of ATMs.

The commonwealth pays the debit-card contractor, ACS State & Local Solutions Inc., nothing.

"ACS makes money from the stores that accept the debit card for purchases," Smith said via e-mail. "It also makes money off some fees to claimants."

How much? Smith didn't know.

Perhaps because the fees are small compared with the woe of job seekers, the debit cards have generated little outcry.

Sharon Dietrich, managing attorney at Community Legal Services, has heard few complaints from clients. Not that she's a fan of the added costs of being unemployed.

"I thought the rules on fees were very complex," Dietrich noted.

John Dodds of the Philadelphia Unemployment Project said he'd prefer that the state push direct deposit.

"I've got my own ATM card," Dodds said. "I don't need theirs."

And Lippe? What he needs is a job, not to be nickel-and-dimed. A prospective employer canceled an interview last week, but the sometime actor did land a day's work as an extra in a Jamie Foxx movie filming at City Hall.

"I made $130," he marveled, "just to sit around for six hours."

Something for nothing after paying for what should be free? Seems reasonable.