The Social Security Administration is making changes that could impact millions of beneficiaries this summer. The Treasury Department is reinstating a garnishment initiative for unpaid federal debts, which means up to 15% of monthly Social Security checks could be withheld to cover outstanding obligations like student loans, taxes, and government-backed mortgages. This change will take effect later this summer, even for retirees already living on a fixed income.
While some low-income protections are in place, there’s no universal exemption, putting many Americans at risk of losing a portion of their benefits. However, retirees have two legal options to shield their Social Security payments from garnishment. The first is to use a separate, dedicated bank account for Social Security deposits only.
Federal law protects two months’ worth of benefits from garnishment if they are directly deposited and not co-mingled with other funds.
social security garnishment options
The second option is to apply for a hardship exemption through the Treasury Department’s Bureau of the Fiscal Service.
Retirees facing financial hardship may qualify for a temporary pause in garnishment if their income is below federal poverty guidelines or they rely solely on Social Security for essentials. Recent data shows that 1.2 million seniors currently owe federal student loan debt, and many Social Security recipients carry tax debt or other federal obligations. Experts recommend reviewing any federal debts in collections, checking the account receiving benefits, and contacting the SSA and Treasury if a garnishment notice is received.
“For many retirees living month to month, losing even 15% of a Social Security check can be devastating,” said Nancy Altman, a Social Security advocate. “It’s vital to know your rights and act before garnishment begins.”
Retirees who are unsure about their benefits or need personalized guidance can visit SSA.gov or call 1-800-772-1213 for assistance. Staying informed and planning ahead is key to maintaining financial security as these changes take effect.