Social Security Benefit Garnishment Rules

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It is against the law for a judgment-creditor to garnish your Social Security benefits. However, if you leave too much in the bank or credit union account where the Social Security Administration direct-deposits your benefit, the "excess amount" is vulnerable to a levy or account garnishment.

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When Creditors Are Allowed To Garnish Social Security Benefits

The federal government can take a piece out of your Social Security benefit, but a private judgment-creditor may not. 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” by the government) Social Security benefits for delinquent federal loans. There are six instances where the federal government may garnish Social Security benefits, including:

  • Garnish benefits to enforce child support 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 (PDF)).
  • 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.

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Levy / Account Garnishment of Your Social Security Direct Deposits

Your Social Security income is protected from a private creditor’s garnishment. It is smart to open a separate, dedicated account or sub-account for the Social Security Administration’s direct deposits. Ask your bank or credit union to add a note to this account indicating it contains Social Security benefits, only. Do not deposit funds from other sources into this special account. Commingling exempt funds with non-exempt funds may lead to all of the funds becoming non-exempt.

Judgment creditors may not remove money deposit by the Social Security Administration from your bank or credit union account. Some states call this action account levy and others call it account garnishment. However, there is a limit to how much is exempt from levy. When your banks or credit unions receives a levy order, it must look back at your last two months of deposits and exempt two months-worth of money. Also, your bank must give you a notice of its actions, and if your state law requires it, time to dispute any funds removed from your account (CFR §212).

Some states exempt more than two months of Social Security

Maryland, for example, allows its residents to exempt $6,000 in their bank or credit union accounts. See the Bills.com resource Collection Laws & Exemptions to learn some of the exemptions for each state.

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 Survivors’ 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, visit the Debt Help section at Bills.com. See the Bills.com article Wage Garnishment if you do not receive Social Security benefits.

Bills Action Plan

If you receive Social Security income and are facing a judgment or already have a judgment, be sure that you are aware that:

  1. A judgment-creditor may not garnish your Social Security benefits
  2. Two months-worth of benefits are exempt from a bank account levy.

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. A lawyer will explain the risks of having outstanding debts, and help you formulate an asset protection plan suited to your individual circumstances.

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  • 35x35
    Jan, 2020
    Don Faulkner

    Bill you are incorrect when you say when anybody other than the federal government because up until the moment that I asked for whistleblower protection because I've been under the retaliatory actions for three years since the discovery of the law and took my complaint to the Social Security Administration I got the first round of garnishment stopped by then- Congressman Ron DeSantis office intervene for me only to have it reoccur this past October. And how it's done is wordsmithing which is a manipulation of the ambiguities of the English language enabling them to toss the word salad and change the whole paradigm. Changing Social Security Employment Insurance pension to just plain social insurance. That enables the Department of Health and Human Services the administrator of all programs labeled Social Service to lump it in with other categories like food stamps and cash assistance programs that are administrated under charity Like rules so they don't have to follow that code for collections practices or anything the way that they're doing it because at the tops program is the last wordsmithing from garnishment to offset all part of the design to perpetuate the fraud with impunity and it's been going on for so long and our government is in such a state of fear over losing his criminal control over all these cash cows that's why they're after Donald Trump like that because he's threatening their criminal existence.

    0 Votes

    • 35x35
      Jan, 2020
      Daniel

      Don,

      It isn't clear to me what entity is garnishing you nor what you are saying about a change in language and how that has allowed different rules to be enforced.

      I feel you are making an important point, so please take another attempt to make things clear and as simple as possible. Thank you.

      0 Votes

  • 35x35
    Dec, 2019
    Maria Pawlus

    My social security check has been garnished from a debt I don’t feel I owe. I need someone to help me I’m 69 I live alone they are taking 328 dollars. I can’t live with what they left me.

    0 Votes

    • 35x35
      Dec, 2019
      Daniel

      I don't have enough information to assist you. Are you saying that your Social Security check is being garnished before it leaves the Social Security Administration? Is it being taken from your bank account after it arrived? Do you have any idea who is taking the money? Do you know what debt caused this issue?

      0 Votes

  • CJ
    Jun, 2014
    candi
    Carbon, IN
    I live in Indiana. I received a citation notice for a debt I owe in Illinois. I received death benefits from Social Security for my children and I also receive benefits from my deceased husband. I want to know whether these benefits (which are my only source of income) can be garnished. I also receive food stamps and medicaid from the government. I do not own any property or any belonging. Can garnishment happen to me and my children?
    0 Votes

    • BA
      Jun, 2014
      Bill
      What is the source of the debt?

      If it is a consumer debt, such as a delinquent credit card, medical debt, or installment loan, then your Social Security benefit cannot be garnished.

      However, if your debt is one of the six exceptions we list above, then it is possible for your Social Security to be garnished. Please reread the article above to learn if your debt is one of the exceptions.
      0 Votes

  • PB
    Dec, 2013
    Paige
    Covington, PA
    i am in default on my student loan and the dept of education already has a lien on any tax returns i get or any other federal payments. my question is, i found out i have inherited a portion of an annuity my father had. since my father has passed away, my siblings and i are to be sent a lump sum payment. can the department of education seize it?
    0 Votes

    • BA
      Dec, 2013
      Bill
      An inheritance is not the type of income a judgment-creditor or a government agency such as the Dept. of Education or IRS can intercept. It is my non-legal opinion the DoE has no legal mechanism to get its hands on your lump-sum inheritance.
      0 Votes

  • MM
    Nov, 2013
    Mary
    Okemos, MI
    Do the same statutes apply to disability? Can disability benefits be garnished if a debt is still owed from a divorce decree? (College tuition) Also, ex-spouse (disability recipient) has an outstanding warrant and has fled state to avoid sentencing.
    0 Votes

    • BA
      Nov, 2013
      Bill
      The facts you shared are unclear to me. Consult with your divorce lawyer or a lawyer who has consumer law experience to learn what, if any, liability you or your ex-spouse have for the debt(s) in question.

      Some states exempt all disability payments from garnishment. Some states carve out exceptions to that rule for child support and taxes. Other states exempt state and federal disability payments, but not payments from a private source, such as an insurance company. Your lawyer will be able to answer your questions in a minute or two.
      0 Votes

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