A new federal law could put the financial situation of poor men into a tailspin due to old child support payments and other debts. The rule, passed by the Treasury Department last month, requires agencies to electronically deposit all benefits into the accounts of recipients. Officials estimate that this will save the federal government about $1 billion over 10 years.
Although this may seem progressive, many people relied upon the paper checks to protect a small part of their income from government seizure for child support payments. Now, men who owe back child support may be required to dedicate their entire check to the payments, leaving no money to pay their personal expenses.
Researchers say that the rule, which was designed to streamline payments and crack down on delinquent parents, will have an unnecessarily harmful effect upon those it purports to help. Many men are afraid of going to prison because they are unable to pay the full amount of the support, even with the new procedures. These men may be unable to pay their bills or even buy food because of the new legislation.
Currently, states are permitted to seize 65 percent of benefit payouts before they are sent to the recipients. The full amount is fair game, however, as soon as it is deposited into the recipient's bank account, which can be frozen indefinitely by individual states. Experts estimate that more than 250,000 people will fully lose access to their income due to the decision.
In many of the cases, the children are fully grown and the payments are long overdue. Men are sometimes unable to pay the support because they have been imprisoned or institutionalized. In fact, some of the men are now supported by their grown children.
Attorneys argue that traditional collection methods are unlikely to be useful against impoverished men because those individuals rely solely upon government benefits and are often unable to work because of disability. The White House is currently reviewing the final version of the rule.
Source: Associated Press, "Child support debts may leave some with no income," Daniel Wagner, Feb. 28, 2012