Federal salaries and retirement benefits are subject to garnishment to provide child support, alimony or both under court orders. Unless a lower maximum garnishment limitation is provided by state or local law, the maximum of the aggregate disposable earnings subject to garnishment to enforce any support order(s) may not exceed:
- Fifty percent of the obligor’s aggregate disposable earnings for any workweek, where the obligor asserts by affidavit, or by other acceptable evidence, that he or she is supporting a spouse, a dependent child, or both, other than the former spouse, child, or both, for whose support the order is issued. An additional 5 percent will apply if it appears on the face of the legal process or from other evidence that such earnings are to enforce a support order for a period that is 12 weeks prior to that work week. An obligor is considered to be supporting a spouse, dependent child, or both, only if the obligor provides more than half of the support.
- Sixty percent of the obligor’s aggregate disposable earnings for any work week, where the obligor fails to assert by affidavit or establishes by other acceptable evidence, that he or she is supporting a spouse, dependent child, or both, other than a former spouse, child, or both, with respect to whose support the order is issued. An additional 5 percent will apply if it appears on the face of the legal process, or from other evidence, that such earnings are to enforce a support order for a period that is 12 weeks prior to that work week.
Federal salaries (but not annuities) are subject to garnishment for commercial debt under court order up to 25 percent of the obligor’s aggregate disposable income for any work week, unless a lower maximum is provided by state or local law.
Rules at 5 CFR 550 describe procedures for collecting non-tax debt owed to the federal government (including debt owed to the Thrift Savings Plan due to an overpayment of a withdrawal), including notice rights to the employee. In general, such deductions may not exceed 15 percent of disposable pay.
Funds deducted to pay for benefits under the Federal Dental and Vision Insurance Program are excluded when calculating pay subject to garnishment pursuant to an order for child support, alimony, or commercial garnishment because 5 CFR 581.105(d) and 5 CFR 582.103(d) exclude amounts which are “deducted as health insurance premiums.” However, funds deducted and deposited in a health savings account are not excluded since an HSA is not considered insurance but rather a savings account.
To comply with garnishment orders on federal retirement benefits, Social Security, and certain other benefits that are paid through direct deposit, as most now are, financial institutions commonly place a temporary freeze on the beneficiary’s account. The financial institution must ensure that the account holder has access to an amount equal to the sum of such payments deposited to the account during a specified two-month period, or to the balance of the account when the order was received, whichever is lower. Certain additional restrictions against freezing accounts apply to garnishment orders obtained by credit card companies.