HELPS Nonprofit Law Firm Discusses Increased Numbers of Garnishments of Social Security by Federal Agencies

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Senior citizens can face a federal agency garnishment of social security income decades after a debt has gone into default. HELPS urges a raise to the minimum amount of social security income protected from garnishment by federal agencies to help protect senior citizens.

The impact on a senior citizen’s survival is the same, but the opportunity to remedy the matter is not. This problem isn’t going away.

Seniors are having 15% of their social security income garnished for decades-old debt owed to federal agencies. Eric Olsen, Executive Director of HELPS, a national nonprofit law firm that assists lower-income seniors, states, "We have recently seen a significant increase in the number of seniors contacting HELPS devastated by a federal agency garnishment." The Debt Collection Improvement Act passed in 1996 tells federal agencies like the Small Business Administration, Farm Home Administration, and Veterans Administration how to collect debt for bad loans. Federal agencies can forward a request to the Social Security Administration to garnish or offset 15% of social security. In 2014 Congress eliminated the statute of limitations controlling how long a federal agency can initiate a 15% garnishment of social security for outstanding debt.

Olsen explains, "There are provisions in the law to stop the garnishment of social security for lower-income seniors who owe taxes or student loans but no such provisions for seniors who owe other federal agencies like the SBA. The impact on a senior citizen's survival is the same, but the opportunity to remedy the matter is not."

Only $750 in social security is protected from a 15% garnishment, a number that hasn't changed since 1996. Olsen goes on, "This law hasn't been used aggressively in the past. I am worried that this practice is going to increase. But even one poor senor facing this problem is one too many. For example, HELPS recently spoke with a 70- year-old widow who received a notice that the SBA had authorized a 15% garnishment of her social security for a debt she had defaulted with her husband over thirty years ago. Her only income was $1150 in Social Security. $172 was garnished from her social security to pay the SBA. After rent, she had $435 left, wondering how she could pay for food and medicine."

The problem isn't going away. The National Council on Aging recently reported that 25 million Americans over 60 are economically insecure, with incomes below 250 of the federal poverty level. https://www.ncoa.org/news/resources-for-reporters/get-the-facts/economic-security-facts/ So what is the solution? HELPS proposes that rules be implemented requiring federal agencies follow the same procedures offered by the IRS or US Department of Education that adjust or waive payments for lower-income or poor persons who owe taxes or student loans. Raising the minimum amount of social security, $750, protected from garnishment will also protect senior citizens.

Olsen concludes, "These garnishments are grinding the faces of poor senors who have no voice. It's difficult to imagine that our lawmakers realize this is happening. HELPS Nonprofit Law Firm urges organizations that help seniors and others to join with HELPS and ask Congress to act now to correct this draconian practice."

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Eric Olsen Executive Director

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