A bill recently introduced in Congress would give victims of domestic abuse more leeway in dipping into their retirement accounts if they plan to use the money for costs associated with leaving an abuser.
The legislation was introduced earlier this month by Georgia Congresswoman Lucy McBath, Congresswoman Gwen Moore of Wisconsin, and Congressman Lloyd Smucker of Pennsylvania. Donned the Savings Access For Escaping and Rebuilding (SAFER) Act, the bill would allow victims of domestic abuse to make withdrawals from their retirement plans without penalties – which is currently common practice based on the account type.
This bill adds a provision to the Internal Revenue Code of 1986 to allow victims to withdraw up to $10,000 from their retirement plan within one year of experiencing domestic abuse. The amount a victim withdraws from their retirement fund may be replenished within a 3-year period from penalty-free distribution.
If passed, the legislation would apply to any victim of domestic abuse – physical, psychological, sexual, emotion, or economic, including efforts made to ‘control, isolate, humiliate, or intimidate the victim, their child(ren), or other family member.
Backers of the bill say it will give domestic abuse victims the ability to access money to assist with escaping from an abuser, promoting safety for themselves and their families, and begin the process of rebuilding their lives.
“We know domestic and family violence have increased during the COVID-19 pandemic as more families are staying home. To make matters more difficult, victims of domestic violence are often restricted from accessing their own finances. This makes it incredibly difficult to escape unsafe situations in the home,” McBath said of the bill. “This legislation supports our efforts to support victims and their children during an especially challenging time. Now, more than ever, we must protect victims and help give them a safer future.”
Co-sponsor Moore said the tax-free access to the funds will lift a burden and pave a pathway to basic necessities and shelter.
Full text of the bill can be found here.