Social Security benefits are protected from garnishment in most cases. If a court grants a judgement to a creditor, they can collect the debt by garnishing the debtor's wages. The court orders the debtor's employer to withhold money from the debtor's wages, or orders the debtor's bank to withhold funds from accounts. This amount is forwarded to the court to pay the creditor. However, federal law shelters Social Security benefits from most garnishment proceedings.
Section 207 of the Social Security regulations prevents general creditors from garnishing Social Security benefits. If an illegal garnishment occurs, the creditor must return the collected amount. When a bank account is garnished or seized, the Social Security Administration's rule against garnishments protects the funds if the beneficiary can show that the funds originated from Social Security benefits. Direct deposit information or deposit slips can be shown as proof.
Section 459 of the Social Security regulations allows garnishments of Social Security benefits to pay for child support and alimony. Child support refers to court-ordered payments, and can include support payments, health care costs, arrearages, interest, penalties, attorney's fees and other costs. Alimony describes court-ordered payments to the spouse or former spouse of a Social Security beneficiary. The alimony payments can include support payments, attorney's fees, interest and court costs. This regulation does not apply to court-ordered property settlements or distributions.
Social Security benefit garnishments are allowed to repay a debt to the federal government. Debts can include back taxes, fines and educational loans. The Tax Payer Relieve Act of 1997 permits the Internal Revenue Service to garnish up to 15 percent of monthly Social Security benefits for unpaid federal taxes. The Debt Collection Act of 1996 allows other Federal agencies to garnish Social Security benefits to pay non-tax debt owed.
The Mandatory Victim Restitution Act permits garnishment of Social Security benefits to pay civil penalties if the beneficiary was convicted of a crime. The civil penalties covered by this law include court-ordered payments for property damage, bodily injury, death and income loss.
Supplemental Security Income (SSI) payments are made to low-income people who have a disability, but don't have enough work credits to qualify for standard Social Security or Social Security Disability benefits. SSI payments cannot be garnished.