New Rule for Garnishment of Federal Benefits Payments Begins May 1
The Department of Treasury, Social Security Administration, Department of Veterans Affairs, Railroad Retirement Board, and Office of Personnel Management have issued an interim final rule implementing restrictions on the garnishment of Federal benefits payments. The rule establishes procedures financial institutions must follow when they receive a garnishment against an account holder who receives certain types of Federal benefit payments by direct deposit.
The rule requires financial institutions that receive such a garnishment to determine the sum of Federal benefit payments deposited within a two month period, and ensure that the account holder has access to an amount equal to that sum up to the current balance of the account, whichever is lower. This interim final rule is effective May 1, 2011.
For more information, see Garnishment of Accounts Containing Federal Benefit Payments which outlines the interim final rule, or contact Randall J. Groendyk.