Owe child support? Rule could cost your only income

Associated Press

WASHINGTON

Thousands of poor and disabled men stand to lose their only income next year because of a change in government policy that will allow states to seize every dollar of federal benefits from people who owe back child support.

Previously, states could capture only 65 percent of benefits from people who opted to be paid by paper check. Advocates estimate that 275,000 men could be left destitute as a result of the change.

The concern is an unintended consequence of the Treasury Department’s decision to pay all benefits electronically, including Social Security, disability and veterans’ benefits, starting next year.

A separate Treasury Department rule, in place since last May in a preliminary form, guarantees states the power to freeze the bank accounts of people who collect federal benefits and owe child support.

By allowing seizure of the remaining 35 percent of benefits, the rules could cause thousands of poor men to lose their only income.

“It’s kind of Orwellian, what’s being set up here for a segment of the population,” says Johnson Tyler, an attorney who represents poor and disabled people collecting federal benefits. “It’s going to be a nightmare in about a year unless something changes.”

In many cases, the bills are decades old and the children long grown. Much of the money owed is interest and fees that add up when men are unable to pay because they are disabled, institutionalized or imprisoned.

Most of the money will go to governments, not to the children of the men with child-support debts, independent analyses show. States are allowed to keep child support money as repayment for welfare previously provided for those children.

In some instances, the grown children are supporting their fathers.

The rule change illustrates how a politically desirable goal like cracking down on so-called deadbeat dads can have complicated, even counterproductive, effects in practice.

States have had the ability to freeze accounts for years. That’s why some people rely on paper checks to safeguard part of their income.

Starting next March, that option will disappear. The Treasury Department will deposit federal benefits directly into bank accounts or load them onto prepaid debit cards. Either way, state child-support agencies will be able to seize all of it.