If you don’t pay your debts, creditors can get a court order to deduct or “garnish” your wages. But what if your income comes from Social Security?
Your Social Security benefit is safe from some, but not all, creditor claims. The ability of a debt collector to take your Social Security income depends on the kind of debt you have and the type of benefit you receive. And even when creditors are allowed to garnish your benefit, there are limits to how much they can take.
Social Security recipients have wage garnishment rights. A local elder law attorney can explain how to protect your benefits from debt collectors.
What Is Garnishment?
Garnishment occurs when a debt collector obtains a court order requiring a portion of a debtor’s earnings or bank account balance to be deducted to satisfy a debt that they owe.
After the creditor sues the debtor and wins a court judgment against them for debt repayment, the debtor’s employer is obligated to withhold a percentage of their wages and submit it to the creditor. This is known as wage garnishment.
There is also nonwage garnishment. Commonly called a bank levy, nonwage garnishment allows creditors to obtain a court order telling a bank to turn over money from a debtor’s account to pay off a debt.
Garnishment can involve federal benefit money as well, including Social Security retirement benefits and Social Security Disability Insurance (SSDI) benefits.
Creditors are not permitted to go after Social Security benefits for private debts such as car loans, credit card bills, and medical debts.
Social Security retirement and disability benefits can be garnished, within limits, to pay back taxes, child support and alimony, federal student loans, or restitution to a crime victim. But these rules do not apply to Supplemental Security Income (SSI). SSI is protected from garnishment even in cases where the creditor can garnish other forms of Social Security income.
Protecting Your Social Security Benefits with Direct Deposit
If your Social Security check is directly deposited into a bank account, federal law requires the bank to protect two months’ worth of benefits from garnishment. But if you receive Social Security benefits by check and deposit the check into your account, the bank is not subject to this restriction.
Let’s say that your bank receives a court order to garnish money from your account. The bank must look at your previous two months of transactions to determine whether you received any Social Security benefits by direct deposit and leave an amount equal to double your monthly benefit payment in your account.
For example, if you receive $1,500 a month in Social Security payments, the bank must protect up to $3,000 in your account from garnishment.
However, if you receive a Social Security check and deposit it in the bank yourself, the bank can freeze the entire amount in the account. To unfreeze the money, you would need to go to court and prove the money in the account came from Social Security.
Debt collectors are also permitted to garnish money in your account that exceeds two months’ worth of Social Security benefits, regardless of how the money is deposited. But you may be able to get this extra money released back to your account if federal or state law exempts it from garnishment.
Can Social Security Be Garnished for Credit Card Debt?
Money can’t be taken directly from your Social Security benefit (i.e., wage garnishment) to repay your debt. And as long as you’re receiving your Social Security payments via direct deposit to your bank account, you should be able to protect all or most of the money in that account from a credit card bank levy (i.e., nonwage garnishment).
A credit card company can, however, go to court and get an order to take money from your bank account. If you’re using direct deposit for Social Security, the bank is required to leave two months’ worth of benefits in your account.
If the account holds both direct deposit Social Security money and non-Social Security money, the debt collector may be able to garnish the non-Social Security money, regardless of how it was deposited, and you would have to show that the Social Security benefits in the account are protected.
Can My Social Security Be Garnished for Tax Debt?
Yes, there are certain debts that allow Social Security payments to be garnished. Those debts include:
- Federal taxes
- Federal student loans
- Child support and alimony
- Crime victim restitution
- Amounts owed to Social Security for overpayment of benefits
If you owe federal taxes, 15 percent of your monthly Social Security check can be used to pay your debt — no matter how much money is left in your bank account — until all the tax debt is paid off.
Can Social Security Be Garnished for Student Loan Debt?
For student loans and other nontax debts, the government can take 15 percent of your Social Security check as long as the remaining balance doesn't drop below $750.
There is no statute of limitations on student loan debt, so it doesn't matter how long ago the debt occurred. In fact, student loan debt has been called a “hidden crisis” impacting Americans aged 60 and older, who owe an estimated $125 billion in student loans.
Legislation has been introduced in the House and Senate over the years to stop the government from garnishing the wages of elderly and disabled Social Security recipients, but so far these efforts have been unsuccessful. Congressman John Larson wrote in March 2024 that around 40 percent of borrowers aged 65 or older are in default on their student debt loans. (Read more about some of the options that may be available if you have student loan debt.)
Can Social Security Be Garnished for Child Support?
The rules for child support and alimony wage garnishment vary from state to state. The maximum amount that can be garnished is:
- 50 percent of your Social Security benefit if you support a child and/or spouse other than the one whose support has been ordered;
- 60 percent if you don't support another child and/or spouse; and
- 55 percent and 65 percent, respectively, if the support ordered is 12 or more weeks in arrears.
Can Social Security Garnish Overpayments?
The Social Security Administration makes billions of dollars in overpayments to beneficiaries each year. Most of these overpayments occur within the SSI program.
The SSA has been criticized for the aggressive tactics it uses to collect these overpayments, including taking money from an overpaid beneficiary’s monthly benefit amount.
Previously, the SSA could withhold up to 100 percent of a beneficiary’s monthly Social Security retirement or disability amount to recover an overpayment, and up to 10 percent of an SSI recipient’s monthly benefit.
Starting on March 25, 2024, the SSA has a new policy that limits all garnishments for Social Security overpayments to 10 percent.
Talk to a Lawyer About Your Social Security Garnishment Rights
If you feel your Social Security is being improperly garnished, you may have to take action, such as sending a letter to a debt collector or petitioning the court, to protect your benefits.
A lawyer can explain what creditors can and can’t do, what your rights are if you’re facing debt collection, and answer any other questions you have about Social Security garnishment. Find a qualified elder law attorney near you.