With the rise of gig, contractor and freelance work, some state agencies are investing in new tech that aims to better verify non-traditional income to lighten caseworker workloads, provide benefits faster and prevent fraud.
A Pew Research Study revealed that 16 percent of Americans had earned money through an online gig platform in 2021. This data reflects a reality that the Missouri Department of Social Services has been grappling with for years: The number of people who aren't paid through traditional W-2 forms has continued to grow since 2018, exploding after the COVID-19 pandemic.
This surge has exposed the limitations of traditional verification systems, leaving caseworkers struggling to keep pace and ensure timely assistance for those in need.
Following a successful pilot program, the department has turned to technology from SteadyIQ, a tech platform whose investors include basketball legend Shaquille O’Neal, to address the challenges head-on.
THE PROBLEM: A GIG WORKER'S INCOME PUZZLE
Traditionally, governments matched income data by using applicant-provided information like name, birth date, address or Social Security number with what appeared on IRS, credit bureau or state databases. However, income paid to many gig workers doesn’t appear in those databases.
“It’s quite a struggle to get that verification because they don’t do a traditional W-2 or paystub every week or every two weeks, it’s really day-to-day income,” said Melissa Wolf, deputy director at the Missouri Department of Social Services, in an interview with Government Technology.
Wolf added that the state instead has to review self-reported information, pay stubs and tax returns in what can be a time-consuming process.
Meanwhile, self-reported data can create vulnerabilities for fraud, or intentionally inaccurate reporting. A 2024 audit of the department revealed several weaknesses in financial reporting, Medicaid and Children's Health Insurance Program administration, and cost allocation, highlighting the need for improved controls and more efficient processes.
AN ALTERNATIVE: INCOME VERIFICATION TECH
SteadyIQ’s technology forms direct connections to income sources, which allows the state to get access to income data directly from income sources.
The technology is what SteadyIQ calls “consent-based verification,” propelling applicants out of the passive process into an alternative “user-directed” flow. According to a case study about the 2023 Missouri pilot within the Missouri Family Support Division, ”Income Passport” reports from SteadyIQ were received in 18 minutes on average, with 88 percent of submissions back within 24 hours.
The result was a 25 percent reduction in rejections for benefits due to incomplete files, and qualified participants received their benefits four days earlier.
“When you’re trying to feed your family in need of food stamps or [Supplemental Nutrition Assistance Program] SNAP benefits, four days is a big difference,” said Wolf.
Feedback from state workers who handle the income-verification cases was also encouraging.
“They felt like they had a better picture of the income and didn’t have to try to decipher printouts or ledgers or anything like that,” Wolf said. “They felt like they had a better holistic view of that income because it was presented to them prior to hanging up on the phone call, and if there were any questions or inconsistencies, they could talk to the participant right then and there and resolve them or find out what more was needed.”
HOW TECH CAN ADDRESS FRAUD
Income verification challenges can also leave the state open to fraud.
Wolf said the new software has given state workers more confidence as they can have a “more complete picture” of income, including other contributions such as financial support from family, dividends or child support.
“You know that the person applying is the person who they say they are, and then a participant can’t actually change any of the data that’s on the report,” said Lexi Gervis, vice president of government affairs and public policy for SteadyIQ. “Someone will review it and consent to send it back, but we maintain the chain of custody of that data so that someone can’t actually alter it. It works also as a fraud detector or built-in fraud deterrent because once someone sees that, then they might not submit it if they knew that their information is inaccurate.”
Gervis added that there is a feature where applicants can leave notes on the report to explain something, but can’t actually change the data.
Missouri reports using SteadyIQ created a more streamlined, less back-and-forth experience.
“From what we’ve seen in the pilot, we do feel like it will solve the problem for especially 1099, gig contributions, the income that’s hard to verify,” said Wolf, adding the state is moving forward and exploring what other options there are to use this tech.
SteadyIQ currently serves six states, including Alabama and Louisiana,as well as several cities.
