Washington, D.C. — Today, Representatives Lucy McBath (D-GA-06), Gwen Moore (D-WI-04), and Lloyd Smucker (R-PA-11) introduced the Savings Access For Escaping and Rebuilding (SAFER) Act, a bill to allow penalty-free withdrawals from retirement plans for domestic abuse victims. The bill gives survivors of domestic abuse the ability to access funds to be used to escape their abuser, promote the safety of 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,” said McBath. “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.”
“Domestic abuse survivors often need access to financial resources to build a safe and successful life for themselves. I am thankful to partner with Representatives McBath and Smucker to introduce this bipartisan legislation that offers the option for these survivors to access their retirement savings tax-free. This access can lift a burden off of survivors and enable them to seek safety, not least of which can mean affording basic necessities and shelter,” said Moore.
“I’m grateful for the opportunity to be working with Representatives McBath and Moore to support survivors of domestic violence. Our legislation would allow those experiencing domestic abuse to use their retirement savings to access the funds necessary to support their transition away from an abusive relationship and into a safe situation. These funds can be used on a tax and penalty-free basis. I appreciate the opportunity to advance this commonsense bipartisan legislation and appreciate the leadership of Representatives McBath and Moore on this important issue,” said Smucker.
Domestic abuse is the physical, psychological, sexual, emotional, or economic abuse of a person, including efforts to control, isolate, humiliate, or intimidate the victim, their child(ren), or other family member. Under current tax law, early withdrawal from a retirement fund can result in financial penalties, including for victims of domestic abuse.
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. Full text of the bill can be found here.