This is a very common question to Bills.com and the Social Security Administration. I encourage you to take the time read the following carefully. This response provides a clear answer to most questions about wage garnishment and Social Security benefits.
According to the Social Security Administration Web page Garnishing Social Security benefits due to a debt,
“If a creditor other than the federal government tries to garnish your Social Security benefits, inform them that such an action violates Section 207 of the Social Security Act (42 U.S.C. 407). Section 207 bars garnishment of your benefits. It can also be used as a defense if your benefits are incorrectly garnished. Our responsibility for protecting benefits against garnishment, assignments and other legal processes usually ends when the beneficiary is paid. However, once paid, benefits continue to be protected under section 207 of Act as long as they are identifiable as Social Security benefits.”
Therefore, a creditor with a credit card, mortgage, private student loan, or auto loan debt may not garnish your wages. The Dept. of Education and other federal agencies may garnish (called “off-set”) Social Security benefits for delinquent federal loans. There are a number of instances where the federal government is permitted to garnish Social Security benefits, including:
- Garnish benefits to enforce child support and /or alimony obligations — Section 459 of the Act;
- The Internal Revenue Service can levy against benefits to collect unpaid Federal taxes — Section 6334(c) of the Internal Revenue Code;
- The Internal Revenue Service can collect taxes due by levying up to 15% of a monthly benefit until the debt is paid;
- The Internal Revenue Service allows beneficiaries to have a portion of their check withheld to satisfy a current year Federal income tax liability — Section 3402 (P) of the Internal Revenue Code; and
- Other Federal agencies can collect money from benefits to pay a non-tax debt owed to that Agency — Debt Collection Act of 1996 (Public Law 104-134).
- Under the Mandatory Victim Restitution Act, certain civil penalties provide the right to garnish benefits under 18 USC 3613.
The Social Security Administration Web page Garnishing Social Security benefits contains the exceptions I just mentioned.
How Much May the Government Off-Set From Your Social Security?
The government may off-set Social Security retirement benefits and Social Security disability benefits, but not Supplemental Security Income as reimbursement for student loans. The government may not off-set an amount leaving you with benefits less than $9,000 per year or $750 per month. It may not off-set more than 15% of your total benefit.
Social Security Garnishment
Accordingly, your income is protected from a private creditor if your primary sources of income are Social Security and a pension. Most people who are in the type of situation you are concerned with choose to keep separate bank accounts for their "exempt" funds and any other money they may receive which is not exempt from garnishment. Commingling exempt fund with non-exempt funds can lead to all of the funds becoming non-exempt, resulting in a bank levy on what the consumer thought was exempt money.
Consult with an lawyer licensed in your state to learn more about your vulnerability to creditor execution in case of any judgment entered against you. An attorney should be able to better explain the risks of having outstanding debts and help formulate an asset protection plan suited to your individual circumstances.
Garnishment of Other Federal Benefits
Many other federal benefits are exempt from garnishment, including:
- Supplemental Security Income (SSI) Benefits
- Veterans' Benefits
- Civil Service and Federal Retirement and Disability Benefits
- Service Members' Pay
- Military Annuities and SurvivorsÂ’ Benefits
- Student Assistance
- Railroad Retirement Benefits
- Merchant Seamen Wages
- Longshoremen's and Harbor Workers' Death and Disability Benefits
- Foreign Service Retirement and Disability Benefits
- Compensation for Injury, Death, or Detention of Employees of U.S. Contractors Outside the U.S.
- Federal Emergency Management Agency Federal Disaster Assistance
For more information about the various options available to consumers who are struggling with debts, I encourage you to visit the Debt Help section at Bills.com. See the Bills.com article Wage Garnishment if you do not receive Social Security benefits.
I hope this information helps you Find. Learn & Save.