For millions of retirees, Social Security benefits provide essential financial support that keeps them above the poverty line. In 2023, Social Security payments helped 22 million people, including over 16 million seniors, avoid poverty, according to the Center on Budget and Policy Priorities.
However, recent changes to federal rules could reduce these crucial payments for some beneficiaries. If you’re one of the retirees who could be affected, it’s important to understand the new garnishment rules coming this summer and what you can do to protect your benefits.
How Upcoming Social Security Garnishments Could Affect You
Starting in July 2025, new rules introduced during President Donald Trump’s administration will come into effect, allowing the federal government to garnish Social Security payments for certain debts. These changes mean that over a million retirees and Social Security recipients could see their checks reduced by up to 15 percent.
Here’s what the changes involve:
15% garnishment for those behind on federal student loans, set to begin on July 24, 2025.
Clawbacks for overpayments: The Social Security Administration (SSA) will work to recover funds that were overpaid in previous years. While initially proposed at 100%, this recovery rate has been reduced to 50% due to public feedback.
Increased collection of federal debts: The U.S. Treasury is reviving garnishment efforts, allowing part of Social Security checks to be withheld to cover unpaid federal debts, including taxes, student loans, and mortgages.
These measures aim to improve the sustainability of Social Security, but they could put a strain on retirees who rely heavily on their monthly payments.
What Causes Social Security Garnishments and Overpayments?
Social Security garnishments primarily affect retirees with federal debts, such as overdue student loans or delinquent taxes. Overpayments can occur for several reasons:
Administrative errors: Mistakes made by the SSA.
Failure to update income or work status: For example, Social Security Disability Insurance (SSDI) recipients are allowed to earn up to $1,620 per month. If they exceed this limit without reporting, it may lead to an overpayment and possible garnishment.
By the end of fiscal year 2023, nearly two million people owed money due to overpayments, with the SSA still working to recover about $23 billion.
How to Protect Your Social Security Payments
If you’re concerned about garnishments or have already received notice of an upcoming garnishment, there are several steps you can take now to protect your Social Security benefits:
1. Request a Waiver or Appeal the Overpayment
Form SSA-632BK: Request a waiver if you believe the overpayment wasn’t your fault and repaying it would create financial hardship.
Form SSA-561: Appeal the amount or status of the overpayment.
Form SSA-634: If you need to reduce the garnishment, submit this form along with documentation of your income and expenses.
2. Use a Separate Account for Social Security Deposits
Federal law protects two months’ worth of Social Security payments in a dedicated bank account from garnishment. To ensure protection, open a separate account just for your Social Security deposits and avoid mixing in other income.
3. Apply for a Treasury Hardship Exemption
If your income is below the federal poverty level or you rely solely on Social Security for essentials like food and medical care, you might qualify for a temporary pause in garnishment. For more information, contact the Bureau of the Fiscal Service or visit fiscal.treasury.gov.
4. Act Before the July 24, 2025 Deadline
With garnishments set to begin soon, timely action is critical. If you’ve received a notice, respond immediately and consider seeking assistance from nonprofit credit counselors or legal experts to help you navigate your options.
Expert Advice on Protecting Your Social Security Income
Legal experts warn that even a small reduction in your monthly Social Security check could have a significant impact on your financial stability.
Nancy Altman, president of Social Security Works, emphasizes the importance of being proactive, stating, “For many retirees living month to month, losing even 15 percent of a Social Security check can be devastating. It’s vital to know your rights and act before garnishment begins.”
With Social Security garnishments looming on the horizon, retirees need to act quickly to protect their benefits. Whether you’re facing overpayments, federal debts, or simply want to prevent potential garnishment, it’s important to understand your rights and take action before July 2025.
By doing so, you can safeguard your income and ensure financial stability despite the shifting policy landscape.
