Social Security Seizures: Learn the Regulations and Protect Your Payments
As a retiree, it's essential to understand the rules surrounding garnishment of your Social Security benefits to ensure this critical source of income remains safe. This article focuses on the Social Security benefits of retirees and not Supplemental Social Security (SSI) or Social Security Disability Insurance (SSDI) income.
Federal benefit payments, including retiree Social Security benefits, are generally protected from commercial creditors under federal law. However, there are specific federal agencies and court-ordered obligations authorized to garnish or levy your Social Security benefits.
- Federal Agencies Authorized to Garnish Social Security Benefits Without Court Orders:
- The Social Security Administration (SSA): Can garnish up to 25% of benefits for certain debts, including court-ordered victim restitution and child support or alimony garnishments managed through the Centralized Garnishment Operations System (COGS).
- The Internal Revenue Service (IRS): Can garnish up to 15% of monthly Social Security benefits through the Federal Payment Levy Program (FPLP) to collect unpaid federal taxes, without a court order.
- The Department of Education: Can garnish Social Security benefits to recover defaulted federal student loans.
- The U.S. Treasury Department: Participates in garnishing benefits (often overlaps with IRS or SSA enforcement actions).
- Court-Ordered Obligations That Can Result in Garnishment:
- Child Support and Alimony: Courts can order garnishment of Social Security benefits to pay child support or alimony, with limits typically up to 50% of benefits depending on circumstances.
- Victim Restitution: Courts can order SSA to garnish up to 25% of benefits to repay crime victims.
- Other court-ordered debts such as spousal support or other family support obligations can also lead to garnishment executed by SSA through court directives.
- Additional Notes:
- Garnishments for regular creditors (e.g., credit card debt) are generally not allowed directly from Social Security benefits.
- Social Security benefits can only be garnished to a limited extent, with legal caps in place to protect a portion of the retiree's income.
- If Social Security benefits cannot be garnished directly, levies may target the beneficiary’s bank accounts instead.
It's crucial to understand the rules surrounding garnishment and take measures, such as having a dedicated bank account, to protect your benefits. If you receive a garnishment notice, don't ignore it. Responding promptly and/or seeking legal advice to understand your rights and potential redress in complex situations is the best way forward.
References: [1] Internal Revenue Service. (n.d.). Federal Payment Levy Program (FPLP). Retrieved from https://www.irs.gov/individuals/federal-payment-levy-program-fplp [2] Social Security Administration. (n.d.). Centralized Garnishment Operations System (COGS). Retrieved from https://www.ssa.gov/cgov/cogs/ [3] Social Security Administration. (n.d.). Garnishment of Social Security Benefits. Retrieved from https://www.ssa.gov/benefits/topics/garnishment/
- In the realm of personal-finance management, it's essential for retirees to be aware that both the Internal Revenue Service (IRS) and the Social Security Administration (SSA) have the authority to garnish Social Security benefits under certain circumstances, as outlined by the Federal Payment Levy Program (FPLP) and the Centralized Garnishment Operations System (COGS) respectively.
- To protect your personal-finance and maintain financial stability as a retiree, it is crucial to educate yourself on the regulations that concern the garnishment of Social Security benefits and be prepared with measures such as allocating funds to a separate bank account, in case of garnishment notices, which should be addressed promptly or with the assistance of a legal professional.
