If creditors and debt collectors are hounding you for money, you may wonder: Can Social Security be garnished? The answer is: It depends on who you owe money to. But, in other words: Yes, the IRS Can Garnished Your Social Security Monthly Benefits!

Banks and other financial creditors can’t touch your Social Security benefits, but when the government is collecting on a debt, those funds are fair game.

The federal government can garnish your benefits for repayment of several types of debts, including:

  • federal income taxes,
  • federal student loans,
  • child support and alimony,
  • nontax debt owed to other federal agencies,
  • defaulted federal home loans and certain civil penalties.

Supplemental Security Income (SSI) cannot be garnished under any circumstance.

What you can lose

Among the government creditors who can grab a piece of your Social Security check, the strongest arm belongs to the IRS. Via the Federal Payment Levy Program, Social Security benefits are subject to a 15 percent levy to pay delinquent taxes. Unlike nontax debts to other agencies, for which the first $750 of your monthly benefits are off-limits to garnishment, the IRS can take its 15 percent cut regardless of how little money you’re left with. Lump-sum death benefits and Social Security benefits paid to children are not subject to this levy.

If you owe money on a student loan, it doesn’t matter how long ago you were in school. A 2005 U.S. Supreme Court case (Lockhart v. U.S.) determined there is no statute of limitations on Social Security offsets to repay student loans. The government can shave off up to 15 percent, provided your remaining monthly benefit doesn’t drop lower than $750.

These are things Old Chics need to know when if comes to financial planning.  If you were depending on living off of your social security benefits in a a few years, now is the time to adjust your game plan. You may not receive as much of your Social Security you were expecting.