The terms garnishment and levy refer to the legal process of intercepting or taking money from wages or bank accounts. For public policy reasons, SSI and SSDI benefits are generally exempt from garnishment or levy.
Legal Procedures
For non-governmental creditors to attempt to levy or garnish an SSI or SSDI recipient's bank account, the creditor must obtain a court judgment. Accordingly, an SSI recipient has the opportunity to contest the garnishment through the court process. Debtors should file a legal response to garnishment at the earliest opportunity in order to avoid complications later.
Exempt Funds
Section 207 of the Social Security Act (42 U.S.C. 407) prohibits non-governmental creditors from garnishing or attempting to levy on an SSI recipient's income or a bank account with SSI income on deposit. Governmental agencies may only garnish bank accounts or withhold SSI benefits if one of the specific exceptions apply.
Exceptions
Creditors are allowed to garnish bank accounts of an SSI recipient only to the extent that non-SSI funds are deposited in the bank account. Government agencies are allowed to garnish SSI income to pay outstanding child or spousal support obligations, unpaid federal taxes and non-tax obligations owed to a federal agency, or when a recipient has consented to withholding for tax obligations for the current year. The IRS can garnish or withhold a recipient's income only up to 15 percent of each monthly payment owed to the recipient.
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