It costs to the government 10 cents to electronically transfer money into an account, opposed to $1 to mail a paper check. The Treasury Department could save as much as $1 billion over the next 10 years with the switch to the electronic payment of government benefits next March.
This sounds like a great idea, but there is one significant snag. The state has the potential to freeze the accounts of those that have outstanding child support payments and also receive government benefits.
Paper checks safeguard against the state’s ability to garnish all of a person’s government benefits because the receiver would be able to cash the check rather than have it deposited into an account with the potential of being frozen.
This means that with the switch to electronic payment of government benefits, thousands of already poor men across Maryland, and the United States more broadly, could be subjected to deepening poverty as their only source of income is garnished. Reportedly, the number affected could climb as high as 275,000 men.
To add insult to injury, in most of these cases where the accounts are being frozen due to unpaid child support, the children are already grown into adults. Most of the unpaid money is in the form of interest. If these adult children received welfare at any point, the outstanding child support payments are owed to the state. This means the children will never even see the money.
Furthermore, in several cases these men weren’t paying not because they didn’t care about their children, but rather they were unable to pay due to circumstances such as incarceration, institutionalization or disability. Many of these fathers now rely on government benefits as a means of subsistence.
If an individual in Maryland is worried that he or she could be affected by this transition because they have unpaid child support, that individual would do well to seek a modification of child support.
Source: The Washington Post, “Move to electronic benefits could leave thousands who owe child support with no income,” Daniel Wagner, Feb. 27, 2012