Washington, D.C. – With Mother’s Day approaching, U.S. Senator Kirsten Gillibrand unveiled new county-by-county numbers detailing the more than 200,000 single mothers across New York who could be forced to pay a financial penalty just for receiving child support. A remnant of the Republican Congress and the Bush administration, the Single Mother’s Penalty charges single parent families who receive child support to pay a $25 penalty for administrative costs.
“While $25 may not sound like a lot of money, for hardworking parents trying to bear the economic recession it can make a big difference,” said Senator Gillibrand. “For a single parent on a budget, $25 is more than a week’s worth of lunches, diapers or baby formula. Balancing the federal budget needs to be a national priority, but it should not be done on the backs of single parents and their children. As many as 200,000 New York families could be affected by this penalty, if we fail to act.”
To protect these families, Senator Gillibrand has introduced the Elimination of the Single Parent Tax Act, the first piece of legislation she authored in the Senate, which would eliminate the penalty. This week, as Mother’s Day approaches, Senator Gillibrand urged Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA) of the Finance Committee to eliminate this provision of the Deficit Reduction Act as part of the committee’s welfare reform efforts.
The Deficit Reduction Act, passed by the Republican Congress and signed into law by President Bush in 2005, contained a provision requiring states to enact a $25 fee on child support enforcement payments that it collects for single parents. While states were granted the options of paying the fee themselves or charging it to the absent parent who pays the support, most states have chosen to charge the fee to the moms and dads receiving support, effectively taxing single parents on the assistance collected from the their absent partners.
Full text of the letter is below.
May 6, 2009
Senator Max Baucus
Chairman, Senate Committee on Finance
219 Dirksen Senate Office Building
Washington DC, 20510
Senator Charles Grassley,
Ranking Member, Senate Committee on Finance
219 Dirksen Senate Office Building
Washington DC, 20510
Dear Chairman Baucus and Ranking Member Grassley,
I am writing you to urge you to include an elimination of the Deficit Reduction Act-mandated fee on child support payments in next year’s reauthorization of the Temporary Assistance for Needy Families program. This fee, which is charged to the single parents receiving assistance in most states, takes money from the single moms and dads who most need assistance during difficult economic times, and undermines the ability of our state child support enforcement programs to deliver for the single parents they work for.
The DRA required states to either charge this fee to the single parent, collect it from the absent parent, or pay it out of state funds, but more than half of all jurisdictions – 28 states – have chosen to deduct the fee from support payments sent to single parents. Twenty states are currently paying the fee out of state funds, depleting money that could otherwise be used to secure more payments from absent parents. And because collecting the fee from the absent parent often means that the state or single parent will have to pay anyways, only two states have chosen to require the payer of support to cover the full fee.
While $25 does not sound like a lot, for a single mother during an economic downturn it can make a big difference. $25 is one week of diapers or baby formula, or a month’s worth of school lunches. And while it takes a big bite out of the wellbeing of these hard-working parents, the savings to the government are minimal – eliminating the fee would cost less than $70 million a year, with most of that money going directly back into the program to help parents care for their children. Child Support Enforcement is an effective program, saving the government money in the long-run and providing numerous benefits to its participants. This fee depletes the ability of states to deliver those benefits and attempts to balance the budget by taxing the working, single-parent families who most need our help. For these reasons, I believe it is crucial that you include an end to this unfair tax on single parents when your committee considers reauthorization of the TANF and Child Support Enforcement program next year.
Sincerely,
Kirsten Gillibrand
United States Senator
