Generally, Social Security benefits are protected from collection efforts from "regular" creditors like banks, credit card companies, and hospitals. However, a creditor may freeze your bank account if you mix your Social Security benefits with other money that is not protected. Your bank should allow you access to two months' worth of benefits, but you may still have to go to court and ask the judge to release any other protected funds that have been frozen. To be safe, it is best to keep your Social Security benefits in a separate account with no other money.
Unlike with "regular" creditors, if you owe a debt to the federal government, your Social Security benefits may be reduced to pay off the debt.
If you owe overdue federal taxes, the Internal Revenue Service (IRS) can withhold up to 15% of your monthly Social Security benefits (except SSI) until the tax debt is paid. You will receive a notice from the IRS before this tax levy begins, and you can request a hearing and propose other payment options. To discuss your appeal rights and collection options, you should contact the IRS directly at 800-829-7650.
Your Social Security benefits (except SSI) may also be reduced if you owe a debt to another federal agency, such as a student loan from the Department of Education, a home loan from the Veterans' Administration, or a food stamp overpayment. These agencies may claim up to 15% of your monthly benefits, but they can't reduce your benefits below $750 per month. You should receive a notice from the agency before the reduction begins, and you must contact that agency—not SSA—to make payment arrangements. You can also contact the Department of the Treasury with questions at 800-304-3107.
Your social security benefits can be reduced if you owe non-tax federal debts. A reduction notice will be sent by the agency you owe money to, not by SSA. If this happens to you, you will have to contact the agency involved to try to make payment arrangements. You will have no right to appeal the reduction of your benefits with the Social Security Administration. The first $750 of benefits will not be reduced.
Updated: January 2017