The first thing creditors look to seize after they receive a judgment against you is your bank account. However, if the funds in the bank come from the Social Security or SSI benefits, creditors have limitations on how to use them or what to do with them.
As a working bankruptcy attorney in a law firm, I often hear these questions like: Can SSI be garnished? Or if there is a custodian or non-custodian, they usually have a query about whether or not SSI be garnished for a back child support obligation. Well, in this case, even the simplest answer would be dependent on your situation and what are the circumstances. In a few instances, the government can garnish your Social Security or SSI benefits.
At the Law Office of Nick C. Thompson, we provide in-depth knowledge in all areas of financial and bankruptcy laws. Whether it is a topic associated with foreclosure, Chapter 7 bankruptcy, Chapter 13 bankruptcy, dealing with mortgages, or even planning a payment in bankruptcy, I meet my clients and let them know the possible options.
In addition, this blog post will provide information about SSI, the treatment of child support obligations under SSI law, and how SSI is protected from creditors.
What is SSI?
In simple words, SSI stands for Supplemental Security Income – a federal income program controlled by Social Security. Nevertheless, the SSI funding does not come from Social Security Taxes; instead, it comes from the general Tax Revenues. Many people give up collecting back child support payments, so when the ex-spouse reaches an early age, they can choose to withdraw social security retirement benefits.
The main purpose behind the application of the SSI is to assist and protect the blind, disabled, and older people who have close to no permanent source of income. With the help of SSI funds, these people can cover their basic survival needs, like buying food, clothes, and shelter.
Difference Between SSI and Social Security Benefits
SSI and Social Security benefits are different from each other. Technically, SSI is not based on your prior history or any of your family member’s history.
People and individuals insured for social security have worked for a defined period and paid their security taxes on time, therefore receiving these benefits.
On the contrary, SSI serves more people with limited income resources and helps them meet specific requirements. The majority of the percentage of people receiving the SSI benefits have fixed incomes and are aged, blind or disabled, as mentioned earlier.
Child Support Obligations in the SSI Program Under Current Law
The Supplemental Security Income SSI program is a last resort source of income for many dependent individuals, including children. To determine the SSI benefit amount for a child, the program excludes 1/3rd of infant support payments from countable income.
Legislation reauthorization 1996 welfare law contains facilities that encourage the states to permit children to receive Temporary Assistance for Needy Families to increase the child support system by an absent parent.
Can SSI be Garnished to Pay Child Support?
The simple answer is NO. The SSI benefits cannot be garnished for child support since they are paid by the SSA based on the recipient’s low income and are specifically designed to provide the disabled with enough facilities to fulfill their basic needs. Even if a parent has to pay child support arrears, they will not be subjected to the garnishment order.
However, the Social Security benefits can be garnished to ensure the payment of child support expenses. The SSA will not allow any retroactive adjustments to social security benefits.
Is Social Security Protected from Creditors?
Generally, protections are made to withhold social security benefits from garnishments and other legal actions that the debt collectors can take; however, it is an automatic process only if the funds are directly transferred to your account. If you are receiving them to a different account, it will no more be an automated process.
A creditor can still freeze your bank accounts if you have delinquent taxes or pending payments to other federal agencies. If they have sent you a garnishment and you did not respond and claim your exemptions, the funds may transfer to the creditors. Even if you have declared your social security disability payments exemptions, the funds will remain unreachable for you unless the case is presented in front of the judge.
To withhold social security benefits to be automatically secured from creditors, it is essential to always transfer them directly to your bank account to make a distinction for you as soon as the creditor contacts them for garnishments.
Contact Our Legal Team at our Law Firm Today!
Our Law firm in Lousiville, Kentucky, has expertise in bankruptcy law and strategy with compassionate client-attorney relationships. Whether you want to file bankruptcy, gain knowledge about social security payments, or have queries regarding SSI being garnished for child support orders in Kentucky, we are here to provide free consultations.
Call us now and talk to Nick; alternatively, you can fill out an online form on our website. I only take limited bankruptcy cases every month to ensure I give proper guidance and assistance to every client.
Frequently Asked Questions
1. If a Custodial Parent Receives SSI, Does it Count as an Income?
No, if a custodial parent receives Supplemental Security Income SSI, it cannot be garnished. SSI won’t be counted as income while calculating the child support order monthly.
2. If a Non-Custodial Parent Receives SSI, Will it be Counted as Income?
No, whether you are a custodial parent or non-custodial parent. If you receive SSI benefits, it will not be counted as income while estimating monthly child support expenses.
3. If a Non-Custodial Parent Receives SSDI Benefit, Will it be Counted as Income?
Yes! A non-custodial parent receiving Social Security Disability Insurance (SSDI) will be included as income while calculating the monthly support order. Calculations use the state’s Child Support Payments Guidelines and chart.
You need to locate child support obligations and calculate how much you owe. Get a copy of the judgment from the court to send it to the social security administration for garnishment.
4. My Kid Receives SSDI Derivatives Benefits. Does it Count for Child Support Purposes?
Firstly, the SSDI benefits are counted as income for the elders and parents from whom they derive. Secondly, if the SSDI benefits are derived from non-custodial parents, per the guidelines and laws, the benefit amount will be subtracted from the obligation calculated.
For instance, if the benefit amount received for child support is 300 dollars, and the obligation calculated after implementing guidelines is 500 dollars, then the order will be issued for 200 dollars. Or else, if the derivative benefit is more than the obligation, then the order issued will be zero.
5. Can Social Security be Garnished in Kentucky?
As per Kentucky state laws, social security benefits are exempt from levy, attachment, garnishments, any other legal obligation, or bankruptcy law.
Resources for Bankruptcy
Louisville, Kentucky Bankruptcy Forms
How to Win Great Chapter 13 Plan Payments • Video
Finishing a Chapter 13 Plan and Getting a Complete Discharge
Chapter 13 Step Plans & Chapter 20 Flexibility to Make a Plan
Chapter 7 or 13 Bankruptcy Trustees and the 341 Hearing
If you are considering bankruptcy, don’t delay because timing is often crucial. Don’t trust the bank or their attorney for advice. I am here to help you. So, contact my office immediately to start the conversation—Nick C. Thompson, Bankruptcy Lawyer: 502-625-0905.
