Before addressing whether debt collectors can garnish your Social Security disability check, let's talk about garnishment. Garnishment is a way for a person or company to collect payment after a court judgment has been entered against a debtor (the person who owes the money). A garnishment directs a third party, such as a bank, to make payments on the judgment out of the debtor’s income. Garnishments can only be used when they are court ordered; that is, the creditor (the person or company who is owed the money) must go to court and win a judgment against the debtor.
Whether your disability payments can be garnished to repay a debt depends on what type of disability you receive and the type of debt involved.
Supplemental Security Income (SSI)
If you receive disability payments through SSI, your benefits cannot be garnished for any reason or by anyone, including the federal government.
Social Security Disability Income (SSDI)
Unlike SSI, there are several scenarios under which portions of your SSDI can be garnished to repay debts (when you owe alimony, child support, student loans, or federal taxes). SSDI stands for Social Security disability insurance.
Court-Ordered Alimony or Child Support
If you've been court ordered to pay child support or alimony, your Social Security disability benefits can be garnished to satisfy your legal obligations. When the agency that handles alimony or child support payments in your state is served an order for garnishment (which is usually filed by the ex-spouse), you will be sent a notice within 30 days. Thirty days later, Social Security will begin withholding the amount needed to comply with the garnishment order.
Alimony and child support can be garnished at the same rate as a garnishment for payment on federal back-taxes (see below.) You can learn more about the details of the law in Social Security Ruling SSR-79-4.
IRS Back Taxes
If you owe the IRS back taxes or payments on the current year’s taxes, it can withhold a certain amount from your disability benefits to repay the debt. This is called a “tax levy.” There are two methods the IRS can use to levy your payments: by the Federal Payment Levy Program (FPLP) or by a manual levy.
FPLP. If your back-taxes are paid by the FPLP, the IRS can take only up to 15% of your monthly income (including your benefit amount). The levy can continue until the debt is fully repaid, you make some other payment arrangement, or the debt becomes unenforceable for some other reason. In addition to SSDI benefits, the IRS can also levy Social Security retirement and survivor benefits. The IRS cannot levy, however, the following:
- Social Security children’s benefits
- lump-sum death payments, and
- SSI (as discussed above.)
Manual levy (non-FPLP levy). Unlike a FPLP levy, a manual levy can take more than 15% of your benefits to repay your tax debt. However, a manual levy takes into consideration your reasonable living expenses before determining how much to withhold.
Learn more about levies at the IRS website.
If you default on your federal student loans, the Treasury Department's Financial Management Service can reduce or offset your SSDI benefits to collect on the debt. Although this process is different from garnishment, it will still reduce the amount of money you receive each month in your disability check. For more information, see Nolo's article on student loan default.
Your SSDI benefits cannot be garnished to pay any other debts other than those discussed above. This means that even if you owe money for any of the following reasons, your disability benefits are protected:
- consumer credit debts, and
- past due state taxes* (The IRS, however, can garnish your state income tax refunds to pay a federal tax debt. Speak to your tax professional for more information.)
You are also protected from any other levies, attachments, or garnishments or other legal process filed against you to collect disability benefits.
by: Melissa Linebaugh, Contributing Author