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Social Security beneficiaries may have their benefits reduced if they miss a child support payment, have unpaid taxes or government debt, or receive an overpayment.
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Benefits will continue until the full amount is paid, but there are ways to delay or reduce the garnishment.
Child support payments, unpaid taxes, or debt owed to the government can prevent you from receiving the full amount of your next Social Security check.
Foreclosure, or when a person’s income is withheld, usually occurs when a person owes money or fails to make required payments. A lien can be triggered when a borrower has unpaid taxes or penalties, or when a borrower defaults on their loan, which is usually a failure to make payments for several months.
Generally, however, Social Security benefits are not covered by non-federal debt, such as credit card debt or other personal loans.
The government is not allowed to collect some of your benefits, such as Supplemental Security Income. However, the federal government can reduce your Social Security retirement and disability benefits under the following circumstances:
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If you owe money for child support, alimony or restitution, your monthly benefits can be withheld.
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If you owe money in taxes, the IRS can pay the tax debt up to 15% of your monthly Social Security payments.
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Your benefits can be increased by up to 15% if you have other untaxed debts to the US government.
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If your Social Security check is more than it should have been, half of your payments will be withheld until the overpayment is corrected.
Generally, if Social Security beneficiaries default on their federal student loans, the Treasury Department can freeze their payments by up to 15%. However, in June, the Department of Education announced it was suspending any future garnishments of Social Security benefits for unpaid student loans.
Generally, garnishments will continue until the delinquent debt or missed payments are paid. However, there are ways to reduce or delay wear.
Beneficiaries who owe money to the IRS can contact the agency and pay the full balance immediately, sign up for a payment plan, or request an offer in compromise, which allows taxpayers to settle their tax debt for less than the full amount. They can also request that the IRS temporarily suspend collection of the taxes owed.
If you are experiencing “immediate economic hardship,” you can contact the IRS to levy a levy on your benefits. The tax office will then work with you to develop a payment plan or take steps to pay off the tax debt.
