Federal Benefits Could be Completely Garnished for Child Support Debt in 2013

Paper checks for some federal benefits will be eliminated in favor of electronic payments starting in March, 2013, due to a new Treasury Department policy. For noncustodial parents who owe child support, 100% of these benefits payments could potentially be garnished and seized by local child support enforcement authorities. The Associated Press reported that “Once paper checks are eliminated, about 275,000 people could lose access to all their income…”

The new policy will affect noncustodial parents who receive Supplemental Security Income (SSI), Veterans Administration (VA) benefits, and/or Social Security, and also owe child support. For individuals who receive these federal benefits, the payments may be most, if not all, of their monthly income. Currently, individuals can protect their minimal income from garnishment by cashing paper checks and never depositing the funds into a bank account. The new Treasury policy would require direct deposits into either a bank account or a federally-authorized electronic benefits card, exposing the funds to child support garnishment.

Practitioners working with noncustodial parents who will be affected by this policy may consider contacting both national and local advocacy organizations that are working to reverse this rule. The National Consumer Law Center (NCLC) submitted a letter to the Social Security Administration on February 12, 2012, supported by 12 other national organizations, and 60 local advocacy organizations from 14 states. Service providers, advocates, and noncustodial parents can either contact the NCLC directly about this effort (Margot Saunders, msaunders@nclc.org), or find a local advocacy organization listed on pages 5 and 6 of NCLC’s letter.