A new federal policy could result in thousands of poor and disabled men losing their social security disability benefits next year. The new government policy will allow states to seize the full amount of federal benefits received by individuals who owe back child support. Previously states were only permitted to collect 65 percent of benefits from those who opted to be paid by paper check.
The additional 35 percent that can now be collected is a result of the Treasury Department’s decision to pay all benefits electronically, including social security disability benefits. A separate Treasury Department rule that has been in place since May 2011 allows states to freeze the bank accounts of individuals who owe back child support and are collected federal benefits.
The new policy could have disastrous consequences for individuals who may now lose their only source of income. In some cases, the child support payments are due for children who are now grown. Many times the money owed is interest and fees that the individuals may be unable to pay due, in part, to his or her disability.
Some estimate that the money will go to governments, and not to the children who are the subject of the child support debt, since states are allowed to keep child support funds as repayment for welfare previously provided to those children. According to some experts, the grown children who are the subject of the child support debts are sometimes supporting their fathers.
States have long since had the ability to freeze accounts to collect past child support payments, which is why many social security disability recipients have chosen to receive their benefits through paper checks. Beginning in March 2013, however, the Treasury Department will deposit federal benefits, including social security disability benefits, directly into bank accounts or load them onto prepaid debit cards, thereby allowing state child support agencies to seize the full amount of the benefits.
The Treasury Department has justified the new policy of electronic payments by pointing to its estimated cost savings of $1 billion over the next 10 years. It currently costs the federal government about $1 to mail a paper check, compared to 10 cents for an electronic transfer.
At Ankin Law Offices, LLC, our dedicated Chicago, Illinois disability lawyers are committed to helping clients obtain the full amount of social security disability benefits to which they are entitled. If you currently owe child support and are unable to work due to a medical condition, please contact us at (312) 600-0000 to schedule a free consultation with one of our knowledgeable Chicago disability attorneys to learn more about how your social security disability benefits may be affected by child support payments.