The state Department of Human Services announced today that 228 workers will be laid off and 31 offices will close under a plan to modernize and streamline the processing of applications and renewals for public assistance benefits.

The department said demand for benefits for welfare, Medicaid and the Supplemental Assistance Nutrition Program, formerly known as food stamps, has increased because of the global economic crisis and that a streamlined process will improve customer service while saving taxpayers an estimated $8 million a year.

DHS plans to consolidate the functions of 31 state offices into a new Eligibility Processing and Operations Division that will process benefits statewide from two facilities in Honolulu and Hilo. The two processing centers will be in operation by Oct. 1.

DHS said it will not need its current large staff to handle the workload and it plans to reduce its workforce by 228 employees, effective June 30.

"We wish it was not necessary to lay off any of our employees," DHS Director Lillian Koller said in a statement, "but we cannot expect taxpayers to continue supporting our current eligibility processing system that is disbursed throughout 31 different offices. The current system is antiquated, inefficient, labor-intensive, costly and slow. And modernizing the system will be better for our customers."

Under the new system, customers can apply for all benefits online or by phone, something that is not available now.