Wage Garnishment in the United States

Administrative Wage Garnishment

Regulations allowing SSA to garnish wages to recover SSI and SSDI overpayments became effective on January 22, 2004. The regulations were published at 68 Fed. Reg. 74177 (12/23/03).

These regulations allow SSA to require employers to garnish pay to recover SSI and SSDI
benefit overpayments, after certain procedural niceties. SSA can bring civil actions against
employers who fail to comply. SSA received several comments on the proposed regulations,
urging SSA not to implement administrative wage garnishment – at least not until SSA has better
procedures in place for timely adjusting benefits when work is reported. SSA did respond to a
DLC comment pointing out that administrative wage garnishment would be a work disincentive.

As a result, SSA will NOT apply administrative wage garnishment in the following
circumstances:

• while Title II benefits are stopped during a reentitlement period (EPE);
• during the deemed Medicare entitlement period (Ticket to Work Medicare extension); and
• when the recipient is “using” a Ticket to Work.”

Otherwise, Administrative Wage Garnishment (AWG) are available to SSA when:

• the debt (overpayment) is past due;
• SSA has completed its billing system (initial, reminder and past-due notice);
• the individual is no longer receiving benefits;
• the individual has not made an installment payment agreement or has missed two
  consecutive payments;
• the individual has not requested reconsideration or reconsideration has been
  denied; and
• the individual has not requested waiver or waiver has been denied.

Prior to implementing AWG, SSA send the individual 60 days advance notice. Within the
60 days, the individual may request information about and review of the debt, inspect and copy
records, and request waiver. If the individual responds within 60 days, SSA will NOT begin
AWG until the review is complete. Good cause applies to this 60 day period. If review is
requested late with good cause, SSA will tell the employer to stop any AWG that has started.
AWG applies to “disposable pay.” Disposable pay is total compensation, including salary,
wages, bonuses, commissions and vacation pay, after deductions for health insurance premiums and amounts withheld as required by law. SSA plans to garnish the lesser of 15% of
“disposable pay” or the amount by which “disposable pay” exceeds 30 X the minimum wage
provided in 15 U.S.C. 1673(a)(2).

The final regulations include provisions for dealing with individuals with multiple garnishment
orders. The regulations also include a hardship provision for requesting a reduction in the
garnished amount. The individual must present evidence showing that the AWG amount would
deprive the individual of income necessary to meet ordinary and necessary living expenses –
including basic expenses, medical & similar expenses, expenses for the support of those for the
individual is legally responsible, & other reasonable expenses which are part of the individual’s
standard of living. However, SSA will not reduce AWG below $10 per pay period.