What can be garnished from social security?

If you are unable to pay debts owed to creditors, or you have financial liabilities like student loans and back taxes, creditors can get a court order to garnish your Social Security benefits. However, there are different rules on when Social Security benefits may be garnished.

Social Security benefits may be garnished depending on the type of debts you owe. If you have unpaid student loans, delinquent federal income taxes, child support payments, alimony, and other payments, your monthly Social Security benefits may be garnished to collect these debts or payments. However, there is a limit on how much creditors, employers, and government agencies can take from your Social Security earnings.

How garnishment works

Garnishment is a way for creditors to collect unpaid debts or delinquent payments. If you owe money to a creditor, government agency, or employer, the creditor can sue you to enforce collection.  

If the court rules in the creditor’s favor, the creditor is given a judgment that states the amount of debt you owe. The creditor can use the judgment to request your bank to garnish your money to pay the debts owed. If approved, the bank will deduct an amount equivalent to the debts owed and deposit the funds in the creditor's accounts. However, some creditors are not allowed to garnish a debtor's account.

Can Social Security Be Garnished?

Social Security can withhold current and continuing Social Security benefits to enforce a legal obligation. Garnishment orders are determined by state laws, and if you disagree with the orders, you can appeal to the court that issued the order. However, there are limits on how much benefits can be garnished.

Here are debts or payments that can be garnished from Social Security:

Delinquent income taxes

The IRS can garnish your Social Security benefits to pay overdue federal tax liabilities. However, it cannot garnish your Supplemental Security Income payments under any circumstances.

If you have unpaid taxes, the IRS can use the Federal Payment Levy Program to enforce the collection of unpaid taxes. Under this program, the Department of Treasury can withhold no more than 15% of the monthly Social Security payments until the debt is fully paid.

If the Department of Treasury has withheld part of your benefits to pay delinquent federal income taxes, you cannot appeal to Social Security for the reduction. However, you can contact IRS to discuss your appeal options.

Student loans

If you have overdue student loan payments, the federal government can garnish up to 15% of your monthly payments, as long as the monthly benefits do not fall below $750.

However, there was a federal repayment pause for student loans in default during the COVID-19 pandemic. As a result, banks were not allowed to withhold benefits to pay federal student loans in default since March 2020. The US Department of Education announced an extension of the pause on student loan repayment through December 31, 2022.

Child support or alimony

If you are supporting a spouse or child other than the subject of the court order, the Federal Consumer Credit Protection Act (CCPA) allows up to 50% of your monthly Social Security benefits to be garnished to pay child support or alimony. If you don’t owe child support or alimony to another child or spouse, up to 60% of your monthly benefits can be garnished. Also, if you are 12 weeks or more in child support or alimony arrears, an additional 5% will be garnished from your monthly benefits.

However, some states have different laws that guide how much benefits can be garnished to pay for court-ordered child support or alimony. If there is a conflict between the state law and CCPA, the lesser amount is garnished from your monthly benefits.

When Social Security benefits are protected

If your sole source of income is Social Security, certain creditors like credit card lenders and personal loan lenders may not be allowed to garnish any money from your monthly Social Security benefits. Typically, federal laws prevent private debts like credit card bills, medical costs, and personal loans from levying your bank account if it contains Social Security income.

However, these creditors can still take other actions if they are unable to garnish your benefits. Some of the actions they can take include reporting your debt to credit bureaus, selling debt to collection agencies, or placing a lien on your home.

What happens if your bank account is garnished or frozen?

If the bank garnishes or freezes your bank account where the Social Security benefits are deposited, you will receive a notice of garnishment. This notice outlines the procedures for claiming exemption from garnishment. In this case, a judge will rule on whether the money will be turned over to the creditor based on factors about the money such as exemptions from garnishment.

Since Social Security benefits are protected from private debts, you will have to prove that the income came from Social Security before the judge rules on whether the money should be turned over to the creditor or debt collector.

If the monthly benefits are set up as direct deposit, there will be a digital footprint showing that the benefits from Social Security. However, if you receive Social Security benefits by check and then deposit it into your bank account, you will need to prove that the money came from protected benefits and should not be garnished.