If a review determines that your resources have gone above the limit, the government has the right to subject your wages or your accounts to garnishments in order to collect any benefit overpayments back from you.
Can my benefits be garnished to pay my government debts, child support, or spousal support? Social Security and Social Security Disability Insurance (SSDI) can sometimes be garnished to pay money you owe to the government, such as back taxes or federal student loans, and money you owe for child or spousal support.
Under the law, Social Security funds are exempt (protected) from garnishment and other actions taken by debt collectors. But if your Social Security funds aren't directly deposited into your bank account, or if you transfer the funds into another account after they're received, the protection isn't automatic.
Bank accounts solely for government benefits
Federal law ensures that creditors cannot touch certain federal benefits, such as Social Security funds and veterans' benefits. If you're receiving these benefits, they would be exempt from garnishment.
Similar to federal income taxes, the government can withhold Social Security benefits if you still have federal student loan debt remaining as you approach retirement. Once again, this can take place because the federal government is the creditor. As much as 15 percent of your benefits may be garnished.
The law sets certain limits on how much debt collectors can garnish your wages and bank accounts. Certain federal benefits, such as social security benefits and veterans' benefits, generally cannot be garnished.
If the value of your resources that we count is over the allowable limit at the beginning of the month, you cannot receive SSI for that month. If you decide to sell the excess resources for what they are worth, you may receive SSI beginning the month after you sell the excess resources.
Certain federal benefits, such as Social Security, SSI, and Veterans Assistance, have additional protections under federal law when those funds are deposited into a bank account or onto a prepaid card. These federal benefits remain exempt from garnishment when directly deposited into your bank account.
Therefore, because their income is protected from debt collection, seniors do not need to worry about losing any of their monthly income to debt collector garnishment. Concern about losing monthly retirement income to garnishment by a debt collector should not be a reason to file a bankruptcy.
A levy allows the creditor to take funds directly from a bank account to satisfy unpaid debts or taxes. In most cases, levies are permitted only by court order as part of a lawsuit judgment. However, certain government agencies, including the Internal Revenue Service, can levy a bank account without a court order.
SSI Reviews: Periodically, the SSA reassesses whether beneficiaries still qualify for the program. Depending on individual circumstances, this can occur as often as annually or as infrequently as every six years, and it often includes examining bank accounts.
Social Security will take into consideration the amount of your assets, because it is a needs-based program. To be eligible for SSI, your assets must be less than $2,000 for an individual and less than $3,000 for a married couple. However, not all assets count towards the resource limits.
In some circumstances, a Federal agency may obtain financial information about you without advance notice or your consent. In most of these cases the Federal agency will be required to go to court to get permission to obtain your records without giving you notice beforehand.
They might also hire asset search companies that use public records and databases to locate accounts. In some cases, creditors can subpoena your employer for information about direct deposits. Once they identify a bank account, creditors can seek a court order to freeze or garnish it.
Exactly how much in earnings do you need to get a $3,000 benefit? Well, you just need to have averaged about 70% of the taxable maximum. In our example case, that means that your earnings in 1983 were about $22,000 and increased every year to where they ended at about $100,000 at age 62.
For those receiving Supplemental Security Income (SSI), the short answer is yes, the Social Security Administration (SSA) can check your bank accounts because you have to give them permission to do so.
Where the overpayment is $2,000 or less and you file a request for reconsideration or waiver, Social Security will waive any collection of the over-payment (unless you were at fault in creating the overpayment). This is known as the SSI $1,000 Rule.
While Social Security income can not be garnished by a credit card company to pay a debt, there is one creditor that can garnish it: the U.S. Department of Treasury. Officially called the Treasury Offset Program, Social Security and other federal retirement benefits can be garnished if you owe: Unpaid federal taxes.
What States Prohibit Bank Garnishment? Bank garnishment is legal in all 50 states. However, four states prohibit wage garnishment for consumer debts. According to Debt.org, those states are Texas, South Carolina, Pennsylvania, and North Carolina.
The bottom line. While debt collectors may not automatically sue over a $3,000 credit card debt, they have the right to pursue legal action if they believe it's a viable option.
If you receive Social Security, we'll suspend your benefits if you're convicted of a criminal offense and sentenced to jail or prison for more than 30 continuous days. We can reinstate your benefits starting with the month following the month of your release.
When your bank receives a court order of garnishment, it usually takes a week to 14 days to implement. Once in place, you won't be able to withdraw funds, and any checks you write (or have written) should be bounced, leaving you with Not Sufficient Funds fees.
Social Security Benefits are only protected if they are direct deposited into an account that ONLY includes direct deposit payments from Social Security. If you deposit any other funds into the account with the benefits from Social Security, the payments will no longer be protected.