Is Social Security Protected From Debt Collection?

Is Social Security Protected From Debt Collection?

Last updated: October 2010

The following questions were submitted to John Roska, an attorney/writer whose weekly newspaper column, "Q&A: The Law," runs in the St. Louis Post-Dispatch (Illinois Edition) and the Champaign News Gazette. This article was published on October 20, 2010.


My Social Security benefits are being reduced to repay an old student loan. Is this legal? I thought that Social Security was completed protected against any kind of debt collection. Also, I never got sued in court, and don’t understand how anything could be collected without any kind of court case.


Federal benefits are protected against “regular” creditors, but not against the Federal government. Uncle Sam has superpowers, and can garnish otherwise non-garnishable benefits, without a court order.

You’re right that Social Security benefits—like all state or Federal benefits, and practically all other unearned income—are ordinarily protected against creditors. Federal and state law makes those benefits “exempt” from collection. They’re completely off-limits, and protected. Creditors can’t touch them.

Exemption laws save you from complete destitution. They codify that old apothegm, “you can’t get blood out of a turnip.” When you’re exempt, you may owe a debt, and have a court judgment entered against you, but creditors can’t get a dime. Not even a judge can squeeze anything of you.

Uncle Sam, however, has superpowers. Those superpowers come from the Debt Collection Improvement Act of 1996, which made it easier for the U.S. government to collect its debts. It permits the U.S. Treasury to reduce Federal pay or benefits to repay Federal debts.

If you owe money to a Federal agency, then, that agency can have the U.S. Treasury reduce your Federal benefits by 15%. They have to warn you in a letter ahead of time, and give you a chance to prove you don’t owe the debt, or that you owe less, but they don’t have to take you to court.

This is a rare example of an “extrajudicial,” or administrative, garnishment. Only Federal or state government can snag your Federal or state income without taking you to court. “Regular” creditors—e.g., banks, credit card companies, hospitals—have to sue and get a court judgment against you first.

An administrative garnishment to recover a Federal debt can only take 15%, and can’t reduce your benefits below $750 a month. That means that Supplemental Security Income benefits (SSI) can never be garnished—unless it’s to repay an SSI overpayment, directly to Social Security. Then, the maximum deduction from SSI is 10%.

Lots of Federal agencies collect debts via administrative garnishments. Some of the more common ones are the Department of Education, collecting unpaid student loans, and HUD, USDA, and VA, collecting unpaid housing loans. But, only “non-tax” debts can be collected this way. The IRS has its own, separate collection methods.

With student loan debt, it’s sometimes possible to get a consolidation loan, with a repayment plan that’s based on your income. If that income is low enough, your payments can be zero. A new loan also stops intercepts of your tax refunds. For more information, call 800-557-7392, or check out:

So, “regular” creditors can never touch your Social Security, or any Federal or state benefit. Only the Federal government, collecting Federal debts, can. And only the Federal government can collect without taking you to court.

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