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On April 15, the Social Security Administration (SSA) will mail its first garnishment orders to employers. The SSA's final regulations for administrative wage garnishment (AWG) became effective in 2004, and this spring the agency will begin using AWG to collect delinquent debts owed by former beneficiaries of its programs.
Impact. Wage garnishment is a process in which an employer is required to withhold up to 15% from an employee's disposable wages and remit that money to the employee's creditor until the debt is paid or otherwise resolved. (Garnishment orders are also used by the courts to ensure that a noncustodial parent contributes his or her mandated child support payments.) The SSA estimates that, over the next 5 years, the AWG initiative will recover about $105 million in delinquent overpayments owed by former beneficiaries of the Social Security and Supplemental Security Income programs.
Note: Unlike other creditors, the SSA does not need to get a court order to initiate the administrative wage garnishment process. The SSA began mailing notices to debtors last month telling them that the agency plans to use wage garnishment to collect debts. The notices give employees the opportunity to dispute the amount owed or repay it before garnishment begins.
Despite this advance notice, you can probably expect questions about the garnishment order from affected employees. As with other garnishment orders, you should not debate the amount or legitimacy of the order with the employee. You are obliged to administer the order and remit required funds. If the employee has issues with the order, he or she must take the matter up with the SSA.
Employer Risk and Recourse
Once you receive initial notification of the administrative wage garnishment …