Military pay garnishment and federal employee pay

Military pay garnishment works through a different door from a civilian job. A private creditor with a court judgment cannot simply send a writ to a commanding officer; it has to ask the Defense Finance and Accounting Service for an involuntary allotment under 32 CFR part 113, with its own limits and its own checks. Federal civilian employees follow a third set of rules.

of pay subject to an allotment is the most a creditor can take or less if state law says so

25%

is the highest yearly rate most lenders may charge active-duty members and their families

36%

of disposable pay is the most a federal agency can take from a federal employee for its own debt

15%

How a creditor reaches active-duty pay

The creditor first needs a court judgment, then applies for an involuntary allotment. The finance office notifies you and gives you a chance to respond before anything is deducted. The allotment can never be more than the lower of 25% of your pay subject to it or the percentage your state allows for garnishment.

Only some pay counts. Basic pay, special and incentive pay and bonuses are in. Housing and food allowances, other allowances, retired pay and separation pay are left out and taxes, life insurance premiums and debts owed to the government are subtracted first, all under 32 CFR 113.3. Child support and alimony take priority and the creditor’s allotment is cut back so the total stays inside the cap.

Judgments taken while you were serving

Many military debt judgments are defaults, entered because the member never answered. The Servicemembers Civil Relief Act makes the creditor file a statement about your military service before a default judgment and the court has to appoint a lawyer for you if you are serving. If a default was entered while you were on duty, you can ask the court to reopen it if you act within 90 days of leaving service and show a real defense.

Base legal assistance offices help members with this for free. Bring the allotment notice and the court papers.

Payday and high-rate loans to service members

The Military Lending Act caps most consumer loans to active-duty members and their dependents at a 36% military annual percentage rate. A loan that breaks the Act’s rules is void from the start, which can be a defense to the lawsuit and to any allotment that follows. More on payday loan garnishment.

Federal employee pay garnishment

If you work for a federal agency, a private creditor’s court order is honored under 5 U.S.C. 5520a and 5 CFR part 582. It is served on the agent your agency names and the limit is the same as for any job under 5 CFR 582.402: 25% of disposable pay or the part above $217.50 a week if that is less or a lower state limit.

A debt you owe a federal agency is not collected with an administrative wage garnishment. It comes out through salary offset under 5 U.S.C. 5514: at least 30 days’ written notice, a chance to see the records and ask for a hearing and no more than 15% of disposable pay unless you agree.

Child support from military or federal pay

Child support and alimony orders reach military and federal pay under 42 U.S.C. 659, including retired pay, at the usual 50% to 65% limits. See child support garnishment. VA disability compensation is shielded from ordinary creditors by 38 U.S.C. 5301.