Can Social Security Be Garnished By Creditors?
Social Security benefits are generally protected from creditors, as long as you are receiving them by prepaid card or direct deposit. There are several federal and state laws that protect Social Security benefits from garnishment, in most cases.
Federal Automatic Protection Rule
The Federal Automatic Protection Rule (issued by the U.S. Department of the Treasury, the Social Security Administration, the Department of Veterans Affairs, the Railroad Retirement Board and the Office of Personnel Management) determines whether Social Security benefits are protected from garnishment.
If you receive your benefits via direct deposit or on a prepaid card, they are generally protected from garnishment. Additionally, 2 months’ worth of funds are protected from garnishment by a bank or credit union. That means if you receive $1,000 in monthly benefits, your bank cannot garnish your account below $2,000 (2 months' worth of funds). Any amount above $2,000 could be subject to garnishment.
Benefits Protected Under The Federal Regulation
In addition to Social Security benefits, the following benefits are also generally protected from debt collectors. This includes:
- Social Security benefits
- Veterans’ benefits
- Supplemental Security Income (SSI)
- Federal Employees Retirement System benefits
- Civil Service Retirement System benefits
- Federal Railroad retirement benefits
- Federal Railroad unemployment and sickness benefits
State Protection Laws
Some federal benefits (including Social Security benefits) may also be protected from garnishment under state laws. For example, the New York Exempt Income Protection Act, or EIPA) also offers some protections against garnishments for people receiving federal benefits such as Social Security. Check with your state's governing body or your local senior aid center to determine how state laws might affect you.
