Streamlining Income Verification in Benefits Applications

When clients apply for benefits like Medicaid and the Supplemental Nutrition Assistance Program (SNAP), they have to verify that their income falls below the threshold for eligibility. For clients, this often means tracking down pay stubs, invoices from gig work, and other financial documents, then uploading them to state systems. On the caseworker side in most states, these documents are reviewed through a time-consuming, manual process.

What are the options for income verification?

Almost all safety net programs are means-tested, meaning that a recipient must qualify for the program based on their income. Yet federal, state, and county governments collect data only quarterly or annually, too infrequently for that information to reliably determine safety net eligibility. States must instead rely on one or more of the following approaches:

• Paper documents: Clients submit paper documents, like paystubs or letters from an employer,  for caseworkers to review.
• Document upload: Clients can submit a photo or scan of their document, saving them from traveling to the office. Caseworkers still review these documents individually.
• Commercial income data: States purchase income data from third party providers, such as Equifax’s The Work Number. Many states limit the use of these databases because of their cost. Some integrations require caseworkers to manually extract the relevant data.
• More frequent payroll data reporting: Updates quarterly payroll reporting used for unemployment insurance programs to per-pay period reporting, so that a state gets timely payroll data directly from employers. Requires more up-front changes but has low ongoing costs. This imposes no burden on clients or caseworkers and best supports ex parte (automated) renewals.
• Consent-based verification (CBV): Clients provide credentials and give permission for a state agency to check their income directly with a trusted source, such as an employer or payroll provider. CBV eliminates paystubs and is usually less costly than commercial income data, but requires an explicit action by the user.

While a “silver bullet” would be ideal, most states will need to provide a combination of some, or all, of the above income verification approaches to accommodate all clients. Many states choose to sequence approaches, offering clients options with less burden and a lower operating cost first before falling back to options that require more manual processing.

That said, consent-based verification is a promising complement to the other processes states currently use to verify people’s incomes. One of CBV’s most promising use cases is its ability to reach populations with non-traditional income, such as gig workers. CBV allows a person to provide credentials and give permission for a state agency to check their income directly with a trusted source, such as an employer or payroll provider. By automating much of the process of verification, CBV simplifies the process of applying for benefits for clients and of verifying eligibility for state workers. From our work helping states apply CBV to their existing application processes, we’ve built a list of recommendations to consider in deciding whether or how to implement CBV.

Implementation considerations for CBV

We view CBV as a complementary step in simplifying applications alongside other technical options. For populations and scenarios well suited to CBV, the tool can save time and streamline the benefits enrollment process. Optimally, CBV offers the opportunity to free up caseworker time both in walking their clients through finding and uploading income documents and reviewing them once they are received. 

As we’ve been working to help states implement CBV, we’ve gained expertise on how to best craft the user experience with an eye towards adoption and accuracy. Here’s a series of recommendations for improving implementation of a CBV tool:

• Make sure the process works for people with more than one job and for people who cannot find their employer in the online database. The experience should clearly tell clients when they may need to add more than one income source and what to do if they can’t find their employer. Smaller employers, franchisees, and other employers not connected to major payroll systems may not be included, and applicants should be guided toward alternative ways to submit their income. Additional instructions for identifying their payroll provider from a paystub or check are beneficial for applicants as well.
• Prepare frontline staff before scaling. Navigators need scripts, visual aids, privacy guidance, escalation paths, and clear expectations about how long review will take. They should know how to help clients without asking for passwords or seeing private account information.
• Consider re-authentication timelines and steps. Consumers authorize payroll access at the time of application, but how long that authorization remains valid varies. If it lapses before an automated renewal, the system can no longer pull data silently. Re-authentication requires consumer involvement, even if minimal, which may create a barrier to renewal.
• Keep document upload as a backup. CBV works well for many people with traditional payroll jobs and some gig workers, but it does not work for everyone. People still need a way to upload documents when CBV does not work.
• Build the experience around trust. Trust remains one of the biggest barriers to CBV use. People may not trust a link that comes from an unknown third-party. Our research points to a chilling effect tied to government distrust, immigration concerns, and fear of penalties if something goes wrong. Government agencies can solve for this by co-branding and using plain-language framing that helps people recognize the validity of the option. 
• Clearly communicate the full experience up-front. Consumers may also get stuck on sign-in steps like multi-factor authentication, trouble recovering payroll passwords, and confusion about which account to use, so states should tell them what the process looks like at the beginning. Including a website or phone number to a helpline serves the dual purpose of proving validity and a clear escalation point if consumers encounter any issues.

Questions states should ask in the process of implementation

As with any new kind of technology, states should compile questions to explore through research, and identify how it will assess its effectiveness once it reaches pilot or implementation. For CBV, some of the questions to consider are:

• How do gig workers and workers with multiple jobs need to experience the flow differently from standard W-2 workers?
• Which outreach channels create the best balance of trust and completion for this context: SMS, email, QR code, phone call, etc?
• How can community based organizations and assisters who help people apply for benefits help troubleshoot safely without crossing privacy boundaries?
• How do people with disabilities and people with lower digital literacy navigate payroll logins, MFA, and handoff flows?
• Do CBV tools support the languages used by the clients in our state?
• How will CBV data be transferred and integrated into the existing system?

By thinking through the user experience for clients and monitoring outcomes to see if people are adopting the new tool effectively, states can be more confident that a CBV process is working the way it’s intended, keeping eligible people enrolled in benefits in an efficient way.