Can Social Security Benefits Be Garnished?

If you are currently receiving Social Security benefits but are behind on your debt payments, you may be worried about the garnishment of your benefits. In this post, we will answer the question – “Can Social Security Benefits Be Garnished?” and explain the types of debt you may have that can cause your Social Security benefits to be garnished.

This post will cover:

  • What is the Garnishment of Wages?
  • Can Social Security Benefits Be Garnished?
  • Can Benefits on Direct Express Card be Garnished?
  • Your Bank’s Responsibility to Protect Your Benefits
  • Where Social Security Can Be Garnished

"Can Social Security Benefits Be Garnished"

What is the Garnishment of Wages?

If you are behind on debt payments, credit cards, student loans, medical bills, and child support, creditors may threaten to garnish your income.

A wage garnishment is when a court issues an order requiring your employer to withhold a certain amount of your paycheck to pay off a creditor until your debt is paid off.

Different garnishment rules apply to different types of debt—and there are legal limits on how much of your paycheck can be garnished.

Generally, the amount that can be garnished is limited to 25% of your disposable income.

Can Social Security Benefits Be Garnished?

Since Social Security benefits are not wages, there are questions about whether they can be garnished. The quick answer is that it depends on the nature of the debt you owe.

If a debt collector sues you and wins a judgment, it can get a court order for your bank or credit union to turn over money from your account or prepaid card.

However, a U.S. Department of Treasury rule requires banks to automatically protect certain federal benefits from being frozen or garnished if they are direct deposited into your account.

The following federal benefits are to be protected from garnishment by creditors:

  • Social Security
  • Supplemental Security Income
  • Veterans
  • Federal Railroad retirement, unemployment and sickness
  • Civil Service Retirement System
  • Federal Employee Retirement System.

As you can see, Social Security is one of the federal benefits that cannot be garnished by creditors.

Can Benefits on Direct Express Card be Garnished?

If your Social Security or other federal benefits are direct deposited onto a Direct Express card or to another prepaid account, they are still automatically protected from garnishment just like money in a traditional bank account.

Your Bank’s Responsibility to Protect Your Benefits

If a debt collector tries to garnish money in your account, your bank must look at your account history to see if you received any federal benefits by direct deposit in the last 2 months.

The bank is required by federal law to protect 2 months’ worth of benefits from garnishment.

If your account has more than 2 months’ worth of benefits, your bank can garnish or freeze the extra money.

However, if that extra money that is garnished is exempt from garnishment under federal or state law, you may be able to go to court to have your money released.

Where Social Security Can Be Garnished

However, there are exceptions to the garnishment rule regarding Social Security and other federal benefits.

If you owe the following types of debt, your Social Security Benefits can be garnished to pay them off.

  • Federal taxes
  • Federal student loans
  • Child support
  • Alimony
  • Victim restitution
  • Other federal debts.

If you owe federal taxes, 15 percent of your Social Security check can be used to pay your debt, no matter how much money is left after the 15% is taken out.

If you have any questions about whether Social Security, please ask us in the comments section below.

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