WASHINGTON -- Thousands of poor and disabled men stand to lose their only income next year because of a change in government policy that will allow states to seize every dollar of federal benefits from people who owe back child support.

Previously, states could capture 65 percent of benefits from people who opted to be paid by paper check. Advocates estimate 275,000 men could be left destitute as a result of the change.

The concern is an unintended consequence of the Treasury Department's decision to pay all benefits electronically, including Social Security, disability and veterans' benefits, starting next year.

"The rule doesn't look at the fact that the money is mostly interest, the money is going to the state, the kids are usually adults, and it's leaving the payer with nothing," says Ashlee Highland, a legal aid attorney in Chicago.

Unable to work since a severe back injury in 2000, Marcial Herrera, 44, owes more than $7,000 -- not to his 22-year-old son, but to the state of New York, because his son received welfare years earlier. His son spoke on his behalf in court, but the judge could not erase the thousands Herrera already owed.

A legal aid attorney suggested Herrera collect his benefits by paper check, which ensures that he will have money for his bills.

Starting next March, that option will disappear. The Treasury Department will deposit federal benefits directly into bank accounts or load them onto prepaid debit cards. Either way, state child support agencies will be able to seize all of it.

Electronic payments are expected to save the government $1 billion over the next 10 years, the Treasury Department says. It costs the government about $1 to mail a check, compared with about 10 cents for an electronic transfer.

The White House is reviewing the final version of the rule. Its impact so far has been limited, legal-aid lawyers say, because people can still use paper checks. A White House spokeswoman did not respond a request for comment.

In a letter sent last week, the National Consumer Law Center and dozens of other groups called on the head of the Social Security Administration to withdraw his support for the rule. "While both current and past due child support orders should be paid," the letter says, it should not result "in the complete impoverishment of recipients" of federal benefits.

"There's not a lot of sympathy for deadbeat dads, and justly so," says John Vail, an attorney with the Center for Constitutional Litigation who provided legal services for the poor for decades. "But everybody's got limits, and I think people . . . are a little quick to rush to judgment about what that life might be like."

Latest videos