@DSumer You really need to rethink the reasoning in that petition - as it stands now it makes little sense. However, I will give you a solution that will work with some planning.
1st and foremost, a person has to pay taxes on the amount of the withdrawal or distribution from an IRA account. You know, the ole - "pay your fair share".
Retirement accounts especially of the tax deferred type (IRA) are for a purpose - RETIREMENT. IRAs are tax deferred account. The amount you take out is taxable as ordinary income because tax was not paid on it before. The targeted purpose of the withdrawal doesn't matter (buying a home). It adds to your MAGI in the year that it is withdrawn/distributed; it has to be so that the person pays ordinary income taxes on it in that year.
Perhaps the money should have been put in some other type account if they wanted to use it for something other than retirement. Like buying a home.
HOWEVER - With just a bit of planning and know how, seniors (actually anybody) could avoid adding to to their MAGI for a targeted type withdrawal (like buying a home) and at the same time taxes paid as they should be to good ole Uncle Sam.
What you do is COVERT part or all of the IRA - pay taxes on it - and put it into a ROTH IRA. Then you wait 5-years and the money is yours to spend anyway you want it and it is not reported in your MAGI again since it was done 5- years previous and taxes have already been paid. You might even get a bit of a bonus too since earnings in this ROTH account grow tax free.
Down Payment for a home purchase or an outright buy/build are always AFTER tax money therefore you don't get to pull the money out from an Individual Retirement Account TAX FREE to buy a home no matter what age one might be or what other benefits they might be losing.
So either do a IRA to ROTH account CONVERSION OR while working put those funds directly in a ROTH rather than an IRA.
You said in your petition . . . . (and I quote)
Those that wish to withdraw or draw down their retirement savings either in one lump sum to avoid a mortgage, or monthly mandatory minimum withdrawals, to qualify for a mortgage, this ordinary income can then disqualifies, negates, or reduces benefits to seniors from government programs such as Medicaid, social security, Medicare, food subsidies, and other aid programs earmarked for the elder, whereas otherwise, they would qualify.
1st there is NO income eligibility for Medicare or Social Security. You maybe speaking about SSI (Supplemental Security Income). I think if you look each of these helping hand benefits up one by one - even having an IRA counts as a resource or asset for those programs thus they would be denied these programs because of this countable resource.
LOL - please rethink your (change.org) petition. You are spreading misinformation.
It's Always Something . . . . Roseanna Roseannadanna