Can unemployment be garnished?

Can unemployment be garnished? Not by a card company, hospital or collector. State law shields unemployment benefits from creditors: Florida, for one, makes them exempt from all claims of creditors and from levy, execution or attachment under Fla. Stat. 443.051 and California does the same in Code of Civil Procedure 704.120. A few debts can still reach them and disability benefits have their own list.

card, medical or collector judgment can take unemployment benefits

No

child support can be withheld from unemployment benefits

Yes

IRS levy can take unemployment benefits

No

Who can take unemployment benefits

• Child support. 42 U.S.C. 503 requires state agencies to withhold support from unemployment benefits for a support order, which is why Florida’s law spells out a support intercept as an exception.
• The state, for its own overpayment. If the agency paid you too much, it can recover the money from later benefits.
• Your tax refund, not the benefit. An unemployment overpayment debt can be sent to the Treasury and taken from a federal tax refund under 31 CFR 285.8. See Treasury offset.

The IRS cannot levy unemployment benefits for back taxes: they are on the exempt list in 26 U.S.C. 6334, along with workers’ compensation.

Unemployment money in your bank account

This is where people lose it. A creditor with a judgment can freeze a bank account and the automatic protection banks give under 31 CFR part 212 covers federal benefits such as Social Security and VA payments, not state unemployment. You have to claim the exemption yourself, inside the short deadline printed on the levy papers and show the deposits came from benefits. Keep benefits in an account with no other money in it if you can. More on bank levies.

Can disability benefits be garnished?

For federal debts, the Treasury can take up to 15% of a monthly SSDI payment, but never so much that you get less than $750 a month, under 31 CFR 285.4.

Can the IRS garnish disability payments?

For SSDI, yes. Through its payment levy program the IRS can take up to 15% of each Social Security payment, including disability, for unpaid federal tax. It cannot levy SSI or service-connected VA disability compensation, both exempt in 26 U.S.C. 6334. If a 15% levy leaves you short on rent or food, the IRS releases levies that cause hardship; see IRS wage garnishment and Social Security garnishment.

Back at work after unemployment

Once you have a paycheck again, a garnishment can restart on wages under the usual limits. A federal agency using administrative wage garnishment has to wait until you have worked 12 months in a row after a layoff; see administrative wage garnishment. Check what any order can take with the wage garnishment calculator.