Notice to Account Holder for Garnishment of Accounts Containing Federal Benefit Payments

On May 12, 2013, the Department of the Treasury, Social Security Administration, Department of Veterans Affairs, Railroad Retirement Board and the Office of Personnel Management (Agencies) published a final rule, which governed the garnishment of certain Federal benefit payments that are directly deposited to accounts at financial institutions. Social Security benefits, Supplemental Security Income benefits, VA benefits, Federal Railroad retirement benefits, Civil Service Retirement System and Federal Employee Retirement System benefits are exempt under Federal Law from garnishment orders. The final rule gave force and effect to the Federal anti-garnishment statutes. The rule also addressed the hardships that recipients of federal benefit payments encountered when a financial institution placed a freeze on an account containing certain types of exempt Federal benefit payments that had been directly deposited, and the difficulties that financial institutions had in determining whether funds deposited into an account are exempt from garnishment. The primary goals of the rule were (1) to ensure that benefit recipients have full and customary access to exempt funds; (2) to protect financial institutions from liability when, having received a garnishment order for an account holder receiving exempt Federal benefit payments, they allow the account holder access to exempt funds in the account; and (3) to establish straightforward, uniform, cost effective procedures addressing the extent to which financial institutions may, pursuant to garnishment orders, freeze or seize funds in accounts that contain Federal benefits. The collection of information in the Final Rule is found in §§ 212.6 Rules and procedures to protect benefits.

The latest form for Notice to Account Holder for Garnishment of Accounts Containing Federal Benefit Payments expires 2023-09-30 and can be found here.

Notice to Account Owner and Record Retention

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