Do you have regular social security disability payments coming in, but also are falling behind on your debt payments? Are you worried that the disability payments may be taken if you keep missing payments? This article will help you understand exactly what can and can’t be taken from you to pay off your debt. The short answer is, no — in most cases your disability payments cannot be garnished in order to pay for your debt — including medical bills. However, this is not true in every circumstance. We will take a look at the exceptions in just a minute.
What is Social Security Disability?
If you worked for a long enough time and paid into Social Security during that time, you are eligible to receive Social Security payments after you retire (or any time after age 62). However, if you become disabled before that time, you can begin receiving Social Security Disability Insurance (SSDI) payments earlier.
How Do You Recieve Social Security Disability Insurance?
The two main requirements to ensure you are eligible for SSDI are:
- Have made regular payments to SS while working jobs covered by SS.
- Have an ongoing medical condition that meets Social Security’s definition of a disability.
If you meet both of these requirements, you will be given SSDI payments.
The Social Security office asks the following questions to determine if your medical condition can be considered a disability:
Are you working?
If you are able to work and can earn more than $1,350 (this amount is larger if you are blind), then you generally are not considered to be eligible for SSDI
Is your condition severe?
Your medical condition must be severely limiting to your ability to perform basic work functions (both mental and physical).
Is your condition found in the list of disabling conditions?
There is a list of medical conditions that will automatically qualify you for SSDI. If your condition is not on the list, the office will have to decide if it is similarly prohibitive of basic function.
Can you do the same work you were doing?
The office considers if you are able to return to the work you were doing before your injury or illness. If you are able to continue the same work you had done before, you will not be considered for the SSDI. If not, you may still qualify.
Can you do other work?
The last thing considered is whether or not you have another career path that you could adequately sustain. For instance, if you worked in construction and received a permanent injury, you may still be able to work in construction management or planning. The Social Security Office does take into consideration what your education, job experience, and abilities are. So they would not consider other feasible work that is outside your scope of education or experience.
If you meet any or all of these requirements, you may be eligible for SSDI. The amount paid in SSDI varies from state to state, however, the national average payment is $604 each month. There are other conditions or circumstances that can raise or lower that amount.
Can Social Security Disability Payments Be Garnished?
If you are living off of SSDI payments, then it’s likely that your financial situation is already a little precarious. Life could become even more difficult if you suddenly had a percentage of your SSDI taken away. So, can SDDI payments be garnished? Luckily, for the majority of consumer debt, the answer is no. For things like credit card debt, car loans, mortgages, and more, your SSDI payments are protected. This also includes medical debts — so your SSDI will not be taken to pay off your medical bills.
What Can Be Garnished?
There are, however, a few exceptions to this. If your debt is from alimony payments, child support payments, or federal taxes, your SSDI can be garnished. There are limits to how much can be taken. For federal taxes, up to 15% of your SSDI can be garnished. For student loans, there is a maximum of 15% garnishment, but you have to be left with $750 per month. The most drastic garnishments come from child support and alimony payments. Up to 65% can be garnished (based on your current dependents and length of missed payments).
If you have other streams of income, these are not necessarily exempt from garnishment just because you qualify for SSDI. So, if you have another job, side income, or something else, this could be garnished just like a normal wage.
How Can You Stop Garnishment?
While your SSDI cannot be garnished for typical consumer debts, if you have a garnishment for one of the other listed categories, it can be hard to make ends meet. So how can you stop a garnishment? Similar to consumer debts, you have a few options to stop SSDI garnishment. Here are a few of your options:
Though this is slightly different from debt settlement for consumer debts, there is still a chance you can negotiate. This may not be applicable to alimony or child support payments. However, for tax arrears, you can file a few forms with the IRS (along with a fee) and see if they will accept a lower payment.
Pay Debt In Full
The most straightforward way to stop SSDI garnishment is to fully pay off your debt (if able). This will immediately end all garnishments. However, this also requires the most upfront payment.
Create a Payment Plan
Sometimes, you can create a payment plan that will allow you slowly pay off your missed payments while also keeping up with your monthly payments. Contact the entity you are paying through to see if this is an available option.
If you are unable to do any of the previous options, but also cannot afford the SSDI garnishment, another option is filing for bankruptcy. Filing for bankruptcy halts all previous judgments against you and will temporarily stop your garnishment. Though bankruptcy doesn’t typically get rid of debts like child support, taxes, student loans, and alimony, it can help you get back on top of your financial situation before continuing to pay them off.
Luckily, your SSDI is protected from garnishment for things like medical debt. However, you are still susceptible to other forms of garnishment. Make sure you understand your rights when it comes to SSDI and that consumer debt collection agencies aren’t taking advantage of your situation. If you have any questions about whether or not your SSDI is being unlawfully garnished, then give Ascend a call! We can help you figure out your situation and what your next steps should be.