Social Security retirement and disability benefits can be garnished (with limits) to pay child support, alimony or restitution. Garnishment is a legal process where a third party, such as the IRS, can seize your assets if you owe a debt.
The Department of Treasury can reduce your Social Security benefits to collect debts you owe to other federal agencies, for instance if you owe student loans payments to the Department of Education. The IRS can also garnish your Social Security payments if you have any unpaid federal taxes. Supplemental Security Insurance (SSI) can’t be garnished.
Who garnishes: The Social Security Administration (SSA), with permission from the court.
How much: The SSA will calculate how much money to garnish based on the garnishment order they receive from your court and withhold that amount from your benefit payment every month. For example, if the order requires a weekly dollar amount, the SSA will multiply that amount by 52, then divide it by 12, and then round up to the next dime in order to determine how much of your benefit will be garnished each month.
Limits: State laws and the Consumer Credit Protection Act (CCPA) both limit garnishment amounts. The amount that can be garnished from your benefit is equal to the lesser of the two limits. The CCPA limits garnishment to:
50% if the Social Security recipient is already supporting a spouse or child other than the spouse or child who is due child support (55% if the support is 12 or more weeks late).
60% if the recipient is not supporting another spouse or child (65% if the support is 12 or more weeks late).
Who garnishes: The SSA, with permission from the court, to compensate victims of certain crimes, typically fraud or another crime resulting in financial losses.
How much: Up to 25% of the defendant’s total monthly benefit amount (MBA). This amount is manually adjusted every time benefits rise or fall.
Limits: Before the SSA can garnish your benefits for a court-ordered restitution, they must review the order to make sure it gives them permission to enforce it.
Who garnishes: The Department of Treasury’s Financial Management Service, for money you owe toward student loans held by the Department of Education.
How much: Up to 15% of your monthly Social Security benefit if you owe “delinquent debt” on student loans, meaning you haven’t paid your balance by the required date. The Department of Treasury’s Financial Management Service takes these payments.
How to prevent garnishment:
Pay the remaining student loan balance in full, or negotiate a settlement of all of the debts that are included in the garnishment order.
Negotiate repayment terms with the Department of Education and send any relevant paperwork and the first payment within 30 days of receiving the notice of intent to garnish.
Request a hearing within 30 days of when the notice of intent to garnish was sent.
How to stop garnishment that’s already happening:
Enter into an eligible rehabilitation agreement for all of the debts included in the garnishment. After five qualifying payments, the garnishment will be suspended until you complete the rehabilitation program.
Request a hearing. If the outcome of the hearing is favorable for all of the debts in the garnishment order, then the garnishment can be stopped.
Who garnishes: The IRS, because of the Taxpayer Relief Act of 1997.
How much: Up to 15% of a recipient’s monthly Social Security benefit until all of the tax debt is paid.
How to prevent this: Request to set up voluntary tax withholding each month from your Social Security benefits.
What you can do about wage garnishment
Unfortunately, Social Security beneficiaries don’t have the right to appeal a garnishment order with the SSA. If you don’t agree with a garnishment order, you can appeal to the issuing court to dismiss or modify the order. If you’re struggling with garnishment, you can:
Contact an attorney or representative of the court where the garnishment order was issued.
Request a hearing from the Department of Education if your garnishment is due to outstanding student loan debt.
Verify that the garnishment order isn’t coming from a private debt collector. Generally, private debt collectors cannot take money that the Social Security Administration deposits in your bank account or on a prepaid card.
Why can’t SSI payments be garnished?
Is any of my Social Security money protected from garnishment?