Millions of seniors rely on Social Security to cover the bills in retirement, and for many, it's their primary source of income. If you depend heavily on Social Security, losing even a small chunk of your monthly payments could constitute a financial shock, which is why it pays to understand when your benefits can and cannot be garnished.

Are your benefits safe from creditors?

If you're collecting Social Security but are behind on your outstanding payments, here's some good news: Most creditors can't touch your benefits, even if you've been delinquent for quite some time. This means that if you're carrying credit card debt, have a host of unpaid medical bills, or are behind on a personal loan, your Social Security benefits are safe. Of course, this doesn't mean that these creditors can't take other legal action against you; there's nothing to stop them from attempting to access other assets of yours to recoup the money they're owed. But when it comes to Social Security, your benefits are off limits.

Senior couple reviewing documents with concerned expressions


If you owe the U.S. government money, however, it's a totally different story. The government is allowed to garnish a portion of your Social Security payments if you have an outstanding income tax bill or are behind on your federal student loan payments. Your benefits can also be garnished if you fail to keep up with child support and alimony payments, depending on the laws of your state.

How much money might you lose? It depends on the nature of your debt, but generally speaking, the U.S. government can garnish 15% of your benefits to get repaid. That said, by law, you must be left with $750 per month in benefits after all is said and done. The only exception applies when you're behind on federal income taxes. In that case, the government doesn't need to leave you with $750; it can take whatever it wants to get the money it's owed.

How to avoid having your benefits garnished

The best way to avoid having a portion (or all) of your Social Security income garnished is to stay current on your tax and student loan payments, and keep up with child support and alimony as required. But if you find that you're unable to manage those payments, your best bet is to proactively reach out to the appropriate agency and work out a payment plan. For example, the IRS allows you to pay outstanding tax debt over time, so if you sign up for one of its installment plans and make your payments accordingly, you won't have to worry about losing Social Security income.

Another thing to keep in mind is that the government will typically reach out with a warning before it goes so far as to garnish your benefits. You'll generally have 30 days to then work out an arrangement, so as long as you respond to that warning and don't ignore it, you can avoid losing a portion of your Social Security income.

When you're heavily reliant on Social Security, you can't afford to risk having even some of your benefits garnished. So don't put yourself in that position. Understand what debts allow for garnishments, and reach out to the agencies involved before subjecting yourself to a loss in income. Many of us make mistakes and fall behind on our financial obligations, and if you take steps to get ahead of the problem, you can avoid repercussions that could damage your finances irreparably.