Social Security Disability Insurance (SSDI) and Garnishment

Social Security Disability Insurance (SSDI) benefits are generally protected from garnishment by most creditors. However, there are certain exceptions to this rule.

Protected from Most Creditors

• SSDI benefits are protected from most creditors: Your monthly SSDI payments are typically safe from garnishment for things like credit card debt, medical bills, or personal loans.
• Bank accounts: If your SSDI payments are deposited into a bank account, the funds are still protected as long as you can trace the funds back to your SSDI payments. If other funds are mixed into that account, the protections may not apply.

Exceptions to Protection

While SSDI benefits are protected from most creditors, there are a few cases where they can be garnished:

• Child Support or Alimony: SSDI benefits can be garnished for child support payments or alimony. The government may withhold a portion of your benefits for these purposes.
• Federal Debts: SSDI benefits can be garnished for certain federal debts, such as overdue federal student loans or back taxes owed to the IRS. In these cases, the government may be able to garnish a portion of your benefits to satisfy these obligations.
• Other Government Debts: If you owe money to certain government agencies, such as federal agencies for fines or penalties, your SSDI benefits can also be garnished.

Supplemental Security Income (SSI) and Garnishment

Supplemental Security Income (SSI) is another form of disability benefits, designed for individuals who have limited income and resources. Like SSDI, SSI benefits are also generally protected from garnishment by most creditors.

Protected from Most Creditors

• SSI benefits are largely immune to garnishment: These benefits are intended for individuals who are most in need of financial assistance, so the law provides strong protections against garnishment by creditors.
• Bank accounts: If you receive SSI and your benefits are deposited into your bank account, the same protections apply as with SSDI. Your SSI payments cannot be garnished unless mixed with other funds that are not exempt.

Exceptions to Protection

Although SSI benefits are largely protected from garnishment, there are exceptions:

• Child Support or Alimony: Just like with SSDI, SSI benefits can be garnished for child support or alimony payments. The government can withhold a portion of your benefits to fulfill these obligations.
• Federal Debts: SSI benefits can be garnished for overdue federal debts, such as student loans or unpaid federal taxes.

However, garnishment for federal debts is generally limited. The government can withhold a portion of your SSI benefits, but it must leave you with at least a minimum monthly amount to cover your basic needs.

Workers' Compensation Disability and Garnishment

If you receive workers' compensation disability benefits, these benefits may be subject to garnishment under certain circumstances.

• Child Support and Alimony: Similar to SSDI and SSI, workers' compensation benefits can be garnished for child support or alimony payments.
• Personal Debts: Workers' compensation benefits may be garnished for personal debts in some states, but this can vary by jurisdiction. Typically, these benefits are more susceptible to garnishment compared to SSDI or SSI.
• Court Orders: In some cases, a court may issue an order to garnish workers' compensation benefits for specific reasons, such as repayment of debts.

VA Disability Benefits and Garnishment

Veterans Affairs (VA) disability benefits are generally protected from garnishment in most situations. However, there are a few exceptions.

• VA Disability Benefits Are Exempt from Garnishment: VA disability compensation is typically protected from garnishment by creditors for things like personal loans, credit card debts, or medical bills.

Exceptions to Protection

• Child Support and Alimony: Similar to other disability benefits, VA disability benefits can be garnished for child support or alimony payments.
• Federal Debts: If you owe federal debts, like overdue federal student loans or taxes, your VA benefits may be garnished to pay these obligations. The amount that can be garnished is typically limited.

Other Types of Disability Benefits and Garnishment

There are various state disability programs and private disability insurance benefits, and garnishment rules can vary depending on the program.

• State Disability Benefits: Some states offer their own disability programs (such as State Disability Insurance). These benefits may be subject to garnishment depending on the state laws.
• Private Disability Insurance: If you receive private disability insurance benefits through an employer or an individual policy, these benefits may not be as protected as SSDI or SSI. Private disability insurance benefits can be garnished if you owe certain debts or obligations, including child support.

How to Protect Your Disability Benefits from Garnishment

If you are worried about garnishment of your disability benefits, there are a few steps you can take to protect yourself:

• Keep Your Disability Funds Separate: If your disability benefits are deposited into your bank account, try to keep them separate from any other income to make it easier to prove that those funds are protected.
• Know Your Rights: Familiarize yourself with the laws in your state and the specific protections that apply to the disability benefits you are receiving. This knowledge can help you better protect your funds.
• Consult with an Attorney: If you are facing garnishment of your disability benefits or have concerns about potential garnishment, it’s a good idea to consult with a disability lawyer or debt attorney who can help you understand your rights and possibly take legal action to stop garnishment.