Washington, D.C. — Legislation introduced by Representatives Lucy McBath (D-GA-06), Lloyd Smucker (R-PA-11), and Gwen Moore (D-WI-04), was approved by an overwhelming vote of the House of Representatives as part of the Securing a Strong Retirement Act of 2022 (H.R. 2954). The bill now heads to the Senate for consideration.
Introduced by McBath, Moore, and Smucker as the Savings Access For Escaping and Rebuilding (SAFER) Act, their legislation would 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 the situation, promote the safety of themselves and their families, and begin the process of rebuilding their lives.
“A heartbreaking mark of this pandemic has been the increase in domestic and family violence as more families stayed home. Too often in these cases, victims of domestic violence are also restricted from accessing their own finances and unable to escape unsafe situations in the home,” said McBath. “Our bipartisan bill supports victims and their children during especially challenging times, and I’m proud to see it included in this important legislation. Now more than ever, we must protect victims and help provide them a safer future.”
“I’m grateful for the opportunity to be working with Representatives McBath and Moore to support survivors of domestic violence. I thank my colleagues in the House for advancing our proposal. Those experiencing domestic abuse must have as many tools as possible at their disposal to escape their situation. These funds can be used on a tax and penalty-free basis. I hope our colleagues in the United States Senate will continue to advance our proposal,” said Smucker.
“Domestic violence survivors fleeing danger need all the financial resources available to build a safe future for themselves. Tapping into retirement funds may provide critical resources to help them secure safe housing and meet their basic needs. I am so thankful that our bipartisan bill is included in the Securing a Strong Retirement Act of 2022, which will provide survivors with the flexibility to access retirement funds without paying a burdensome penalty,” said Moore.
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.
The Representatives’ legislation 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.