Chelsea pilots debit card-based guaranteed income program

In response to the effects of the COVID-19 pandemic on the community, Chelsea last fall launched a pilot guaranteed-income program in the form of reloadable debit cards, called Chelsea Eats: Chelsea Food Debit Card Program.

The city initially began a municipal food distribution effort in April 2020 in order to assist those facing food insecurity that deepened during the pandemic. But running municipal food pantries took significant time and effort, and city funds were being used on non-food items, like transportation, packing boxes and unloading trucks, according to City Manager Tom Ambrosino.

“On a hot summer day, people are waiting in line for an hour to get a box of food to have to carry it back to their home,” Ambrosino said. “A lot of us felt this was an undignified way for people to meet their food needs.”

So the city pursued “a better way.”

The program was announced last July, and recipients were selected by lottery in September, with the first distribution coming right before the Thanksgiving holiday. The city received more applications than it had the funding for. A total of 3,615 households applied for the program, and 2,074 were chosen in the weighted lottery.

The cards were provided in a partnership with Visa and can be used anywhere Visa is accepted. The amounts on the cards vary by household size, with most receiving $400 per month, with one-person households receiving $200 and two-person households receiving $300.

Ambrosino said funding for Chelsea Eats has come from general city funds, the federal CARES Act, and philanthropic contributions. The city received significant support from Shah Family Foundation, as well as United Way, Massachusetts General Hospital and Beth Israel.

The cards can be replenished monthly for a period of six months, and are currently due to expire on June 30. Ambrosino said he anticipates that the program will be able to run through Labor Day, but is not a financially viable long-term program for the city.

“These kinds of programs need to be run at a larger scale, supported by the state and federal government,” Ambrosino said.

In partnership with the city, The Rappaport Institute for Greater Boston at the Harvard Kennedy School released an evaluation on initial card spending through early March. The evaluation has information on each purchase made with a card, including store or vendor name, location, date of purchase, amount spent, and general description of what the store or vendor provides (but not the items purchased). The evaluation finds that 73.3% of spending occurred at places where food is the primary product, with 32% at Market Basket grocery stores, overwhelmingly at the Chelsea location. The evaluation also found that more than half of total spending occurred in Chelsea.

“We needed to get people through the pandemic, which we have done, gotten them through the worst of it,” Ambrosino said. “But we also wanted to prove that this kind of program can work, and the funds can be spent responsibly.”