TN 16 (02-14)

PR 04015.049 Utah

A. PR 14-037 David Garnishment Case—REPLY

DATE: December 31, 2013

1. SYLLABUS

A writ to garnishment for alimony issued by the state of Utah cannot conflict with Utah State or federal law.

Utah has specific guidelines as it pertains to:

  • the limits on garnishment withholdings

  • the duration of garnishment withholdings

Utah also has specific guidelines for release of garnished amounts.

2. OPINION

Question Presented and Short Answers

You requested a legal opinion regarding Utah’s garnishment procedures. Specifically, you asked:

1. Whether SSA must answer the interrogatories attached to the writ of continuing garnishment, and if so, whether SSA may serve its answers on the judgment creditor or his/her attorney, without the debtor/wage earner’s consent.

Short Answer: Yes, but we recommend that SSA complete and serve different interrogatories than those attached to the writ. The Privacy Act does not prohibit releasing the information, because there is a routine use that specifically allows the disclosure.

2. Whether SSA must serve the writ of garnishment and other papers required under Utah law on the debtor/wage earner, whom SSA has already notified of the garnishment.

Short Answer: Yes.

3. Whether SSA must wait 20 calendar days after service of these documents before it may release the amounts withheld to the judgment creditor.

Short Answer: Yes. The 20-day period allows the debtor to contest the garnishment.

4. Whether SSA may enforce the writ for longer than 120 calendar days, since the debt will not be extinguished by mid-December 2013.

Short Answer: No. The writ is not enforceable for longer than 120 days, even if the debt is not yet satisfied.

In addition to the above questions, we considered whether the amount SSA is withholding to satisfy the alimony judgment complies with Utah law. Although the writ directs that SSA withhold 65% of the debtor/wage earner’s monthly benefit, this amount exceeds the maximum withholding allowed under Utah law. SSA must return the excess amounts withheld to the wage earner.

Finally, we considered whether SSA should comply with the judgment creditor’s attorney request to release amounts withheld prior to October 15, 2013, the date the wage earner filed for bankruptcy, directly to the wage earner. We conclude that SSA should continue enforcing the writ until the 120 days expires.

Background

On August 13, 2013, the Third Judicial District Court of Salt Lake County, Utah, issued a Writ of Continuing Garnishment and Instructions for Alimony Arrears. The District Court Clerk signed the writ electronically at the top of the first page. The writ, which was served on the Salt Lake City Field Office by mail or hand-delivery, states that the court has entered a judgment for $11,110.83 against the wage earner, David, for past due alimony. Writ at 2, 2.

The writ directs SSA to (1) answer the interrogatories attached to the writ and serve a copy of the answers on the judgment creditor’s attorney and David; and (2) serve one copy of the writ and the Notice of Garnishment and Exemptions form, and two copies of the Reply and Request for Hearing form on David. Writ at 2-3, 4. Attached to the writ are two copies of a form entitled “Garnishee’s Answers to Interrogatories for Property Other Than Earnings.” The writ instructs SSA not to release any amounts withheld until 20 calendar days after it serves the writ, its interrogatory answers, and other required papers on the wage earner. The writ provides that it is effective for 120 calendars days after service on the agency or 120 calendar days after the date of expiration of an earlier writ, whichever is later. Writ at 3, 6, 7(A).

The writ directs SSA to withhold 65% of David’s monthly retirement benefit. Writ at 3,

7(A). SSA has not released any amounts withheld to the judgment creditor. The judgment creditor’s attorney recently informed you that David filed for bankruptcy on October 15, 2013. The attorney requests that SSA immediately release any funds withheld on or before October 15, 2013, to David; and that funds withheld after the bankruptcy filing date be distributed in accordance with the writ.

Analysis

1. The Writ Is Valid on Its Face and Was Properly Served on SSA

On its face, the writ comports with Utah law. A court of competent jurisdiction issued the writ, and it was mailed or hand-delivered to an SSA field office. 1 The writ indicates that it is to collect alimony, and has enough information (full name and last four digits of the Social Security number) for the agency to identify the person whose benefit payments the writ will affect. See 5 C.F.R. § 581.203.

2. SSA Must Comply with Utah’s Maximum Withholding Laws

The writ directs SSA to withhold 65% of the debtor/wage earner’s monthly benefit. Writ at 3, ¶ 7(A). This amount exceeds that allowed under Utah law. While the Consumer Credit Protection Act (CCPA) permits a maximum withholding rate of 65%, see 15 U.S.C. § 1673, 2 a state may provide greater protection to debtors than the CCPA. See POMS GN 02410.215. Utah is such a state; thus, SSA must comply with Utah’s withholding limits.

Under Utah law, the amount garnished may not exceed the lesser of 25% of the disposable earnings for the pay period; or the amount by which the disposable earnings exceed 30 times the federal minimum hourly wage. See Utah Code Ann. § 70C-7-103(2); Utah R. Civ. P 64D(a)(1), (2). “Disposable earnings” mean that part of the earnings of an individual remaining after the deduction from those earnings of amounts required by law to be withheld by law (including Federal and state income taxes, FICA taxes, Medicare taxes). See Utah Code Ann. § 70C-7-103(1)(a); Utah R. Civ. P. 64(a)(4); see also Utah Code Ann. § 70C-7-103(1)(a).

Here, David’s monthly retirement benefit, minus the deductions required by law, is $2036. This reflects David’s monthly disposable earnings; 25% of this amount is $509.

For a monthly payment, 30 times the federal minimum hourly wage is $941.76. 3 David’s monthly disposable earnings (i.e., his retirement benefit minus deductions required by law) exceeds this amount by $1,094.64.

The amount subject to garnishment is the lesser of these two figures, or $509. According to the SSA garnishment notices at issue (see attached), the agency has withheld 60% of the wage earner’s monthly benefit or $1,221.60 since August 2013. SSA must return excess amounts withheld to the wage earner.

3. SSA Must Follow a Writ’s Directives That Comply with State Law and Are Not Contrary to Federal Law

Service of the Writ and Other Required Papers Required by Utah Law

The federal government has waived its sovereign immunity for purposes of enforcement of alimony obligations, see 42 U.S.C. § 659, which means SSA must comply with Utah garnishment procedures that do not conflict with federal law. Therefore, SSA must serve the writ and the other required papers according to the writ’s directives. Further, as the writ directs, SSA may not release the funds withheld until 20 days after SSA serves these documents on the wage earner. These documents include instructions to contest the garnishment. The SSA garnishment notices the wage earner received are insufficient for this purpose.

However, the interrogatories attached to the writ are for “property other than earnings,” rather than “earnings.” Social Security benefits are earnings under Utah law. See Utah R. Civ. P. 64(a)(5). Thus, it appears that the judgment creditor provided the wrong set of interrogatories. As such, we recommend that SSA not answer the interrogatories provided and answer instead the interrogatories specific to “earnings” (attached, also available at the link provided in footnote 4). Since David is not an SSA employee, SSA is only obligated to answer section (1) of the form and may skip the remaining questions. However, we recommend that SSA complete the remaining sections of the form, particularly section (4), which contains detailed instructions for calculating the maximum withholding under Utah law. (For the reasons explained below, the writ at issue is enforceable for only 120 days from the date of service, not one year, as reflected under section (3)(b) of the attached correct interrogatories.)

We note that the interrogatories served with the answer and the ones that we recommend you complete both request information about David’s benefit amounts. Ordinarily, the Privacy Act and Social Security Act would prohibit SSA from disclosing information about David’s benefit amounts without his consent. See 5 U.S.C. § 552a; 42 U.S.C. § 1306(a). Here, however, a routine use specifically allows the disclosure. See System of Record Notices, Master Beneficiary Record, http://www.socialsecurity.gov/foia/bluebook/60-0090.htm, (Routine use 22 allows disclosure “[t]o a party named in an order, process, or interrogatory, in accordance with section 459 of the Social Security Act, if a designee of the Agency is served with any such order, process, or interrogatory with respect to an individual’s child support or alimony payment obligations”). Thus, the information requested in the interrogatories may be disclosed as directed by the writ.

The Writ’s Enforcement Period

The writ is not enforceable for longer than 120 days, even if the debt is not satisfied. A writ of continuing garnishment applies to payments to the wage earner from the effective date of the writ until the earlier of the following: 120 days; the last periodic payment; the judgment is stayed, vacated or satisfied in full; or the writ is discharged. Utah R. Civ. P. 64D(l)(2)(A)-(D). “A writ is effective upon service.” Id. 64(d)(3)(A).

We note that for writs served on or after November 1, 2013, a writ of continuing garnishment may remain in effect for one year, rather than 120 days. See UT Order 13-0018, Utah R. Civ. P. 4D(l)(2)(A) (effective Nov. 1, 2013). In this case, the writ was served prior to November 1, 2013, so this provision does not apply.

4. David’s Bankruptcy Does Not Affect the Writ

We have confirmed that David filed for bankruptcy on October 15, 2013. However,

David’s bankruptcy petition does not affect the garnishment order.  The bankruptcy code specifically provides that the filing of a bankruptcy petition does not operate as a stay “with respect to the withholding of income . . . for payment of a domestic support obligation under a [judicial order].”  11 U.S.C. 362(b)(2)(C); see also POMS GN 02410.221.  A debtor’s right to receive social security benefits may be exempted from property of the bankruptcy estate.  See 11 U.S.C. 522(b)(2), (d).  However, David did not list his social security benefits as exempt property in his bankruptcy petition.  In addition, although property that is exempt from the bankruptcy estate is ordinarily not liable for any of the debtor’s debts, there is an exception for domestic support obligations, which are not subject to discharge in bankruptcy.  See 11 U.S.C. 523(c)(1); 11 U.S.C. 523(a)(5). Thus, David’s bankruptcy does not change SSA’s obligation to enforce the writ in accordance with state law.

Discussion

Federal law limits the percentage of an obligor’s aggregate disposable earnings that may be subject to garnishment to 50%, if the obligor is supporting another spouse and/or child. If not, the limit is 60%, except the limits are 55% and 65%, respectively, if the obligor is more than 12 weeks in arrears. See 15 U.S.C. § 673(b)(2)(B) (Consumer Credit Protection Act (CCPA)); POMS GN 02410.215(3). Further, the CCPA’s implementing regulations provide that “[a]n obligor shall be considered to be supporting a spouse, dependent child, or both, only if the obligor provides over half of the support for a spouse, dependent child or both.” 5 C.F.R. § 581.402(a)(1). Thus, the agency may not apply the lesser percentages, unless “the obligor asserts by affidavit, or other acceptable evidence,” that he or she provides over half of another spouse’s and/or dependent child’s support. Id. Other acceptable evidence might include supporting affidavits (e.g., from the obligor’s current spouse) or a recent tax return that reflects filing status, exemptions, etc. consistent with the beneficiary’s allegation that he or she provides more than half support. See id. § 581.302(a)(2); Memorandum from Chief Counsel, Assistant Regional Counsel, R7, to Ass’t Reg. Comm., Definition of “Head of Household” (March 19, 1990).

In our opinion, the beneficiary’s marriage certificate and the motion for an order establishing support of a second family are insufficient proof that he provides over half support to a second family. Although the motion includes the beneficiary’s sworn statement, this evidence substantiates only that the beneficiary remarried in September 2009. The beneficiary assumes that because he remarried, he “is, therefore, supporting a second family.” But the mere fact of marriage does not establish that the beneficiary is providing any support for his new spouse—let alone over half support. Assuming the field office would concur, the agency may not comply with the beneficiary’s request to reduce the withholding percentage to 55%. However, the beneficiary may subsequently present additional evidence that he provides over half support to a spouse and/or dependent child. If the field office finds this evidence sufficient, that office must forward copies to the beneficiary’s former spouse (or her representative) and to the issuing court, “together with notification that the obligor’s support claim will be honored,” i.e., notice that the agency will limit withholding to 55%. 5 C.F.R. § 581.402(c). If the beneficiary’s former spouse disagrees with the reduced withholding percentage, she “should immediately refer the matter to the court, or other authority, for resolution.” Id. §581.402(a)(3).

Conclusion

SSA must comply with the garnishment procedures set forth in the writ that do not conflict with Utah or federal law. Specifically:

  • SSA may withhold only $509 from David’s monthly Social Security benefit and must return excess amounts withheld to him.

  • SSA should serve the writ and the other required papers, including answers to the correct interrogatories, in accordance with the writ, but cannot release amounts withheld until 20 calendar days after said service on the wage earner.

  • Because SSA received service of the writ prior to November 1, 2013, it is not enforceable for longer than 120 days after receipt.

David’s bankruptcy does not affect SSA’s obligation to enforce the writ in accordance with state law. We recommend that you contact us immediately, if you receive a bankruptcy court order directing SSA to pay the amounts withheld directly to a trustee.

John Jay. Lee
Acting Regional Chief Counsel, Region VIII

By_____________
Yvette G. Keesee
Assistant Regional Counsel

B. PR 12-131 Request for OGC Opinion-Charlie Case (Garnishment)—REPLY

DATE: January 25, 2011

1. SYLLABUS

Proof of marriage, as sole evidence, does not constitute proof of half support necessary for reduction in withholding in garnishment cases when considering the Consumer Credit Protection Act (CCPA) withholding limits.

2. OPINION

Question Presented

You asked whether the agency may reduce the percentage it withholds from the beneficiary’s monthly benefits (“the withholding percentage”) to satisfy a support obligation from 65% to 55%, based on a marriage certificate and a motion for an order establishing support of a second family, or whether the beneficiary must present a court order stating he is supporting another family.

Short Answer

The agency may not reduce the withholding percentage to 55%, unless the beneficiary presents acceptable evidence that he provides over half support to another wife and/or dependent child. Although the beneficiary is not required to present a court order as evidence, in our opinion, the marriage certificate and the motion are insufficient evidence that he provides over half support to another family. If, however, the beneficiary presents additional evidence the agency believes is sufficient, the agency must forward copies of this evidence to the former spouse (or her attorney) and to the court that issued the writ of garnishment, with notice to both that the agency plans to reduce the withholding percentage to 55%. If the former spouse wishes to contest the reduction, she should immediately refer the matter to the issuing court for resolution.

Background

In October 2009, the beneficiary filed a “Verified Motion for Order Establishing the Support of a Second Family” in a Utah state district court (presumably the same one that issued the writ of garnishment). He asked the court to prohibit the agency from withholding more than 55% of his monthly benefits, stating that he was married on September 9, 2009, “and is, therefore, supporting a second family.”

The beneficiary presented a copy of his current marriage certificate and the motion to the Murray, Utah Field office and requested reduction of the withholding percentage to 55%. That office reduced the withholding percentage from 65% to 55%, effective December 2009.

Shortly thereafter, the former spouse presented a document entitled “Minutes Law and Motion,” which reflects the court refused to respond to the beneficiary’s motion. Thus, in February 2010, the field office reinstituted the 65% withholding percentage.

Next, the beneficiary presented the marriage certificate and the motion to a field office in Nevada (where he resides). That field office reduced the withholding percentage to 55%, effective November 2010.

In June 2012, the former spouse contacted the Murray, Utah Field Office and questioned why the agency was not applying the 65% withholding percentage. She resubmitted proof the court had declined to respond to the beneficiary’s motion, and the office increased the withholding percentage to 65%. Predictably, the beneficiary contends the agency must reduce the rate to 55% because he is remarried and supporting a second family.

Discussion

Federal law limits the percentage of an obligor’s aggregate disposable earnings that may be subject to garnishment to 50%, if the obligor is supporting another spouse and/or child. If not, the limit is 60%, except the limits are 55% and 65%, respectively, if the obligor is more than 12 weeks in arrears. See 15 U.S.C. § 673(b)(2)(B) (Consumer Credit Protection Act (CCPA)); POMS GN 02410.215(3). Further, the CCPA’s implementing regulations provide that “[a]n obligor shall be considered to be supporting a spouse, dependent child, or both, only if the obligor provides over half of the support for a spouse, dependent child or both.” 5 C.F.R. § 581.402(a)(1). Thus, the agency may not apply the lesser percentages, unless “the obligor asserts by affidavit, or other acceptable evidence,” that he or she provides over half of another spouse’s and/or dependent child’s support. Id. Other acceptable evidence might include supporting affidavits (e.g., from the obligor’s current spouse) or a recent tax return that reflects filing status, exemptions, etc. consistent with the beneficiary’s allegation that he or she provides more than half support. See id. § 581.302(a)(2); Memorandum from Chief Counsel, Assistant Regional Counsel, R7, to Ass’t Reg. Comm., Definition of “Head of Household” (March 19, 1990).

In our opinion, the beneficiary’s marriage certificate and the motion for an order establishing support of a second family are insufficient proof that he provides over half support to a second family. Although the motion includes the beneficiary’s sworn statement, this evidence substantiates only that the beneficiary remarried in September 2009. The beneficiary assumes that because he remarried, he “is, therefore, supporting a second family.” But the mere fact of marriage does not establish that the beneficiary is providing any support for his new spouse—let alone over half support. Assuming the field office would concur, the agency may not comply with the beneficiary’s request to reduce the withholding percentage to 55%. However, the beneficiary may subsequently present additional evidence that he provides over half support to a spouse and/or dependent child. If the field office finds this evidence sufficient, that office must forward copies to the beneficiary’s former spouse (or her representative) and to the issuing court, “together with notification that the obligor’s support claim will be honored,” i.e., notice that the agency will limit withholding to 55%. 5 C.F.R. § 581.402(c). If the beneficiary’s former spouse disagrees with the reduced withholding percentage, she “should immediately refer the matter to the court, or other authority, for resolution.” Id. §581.402(a)(3).

Conclusion

The agency may not reduce the beneficiary’s withholding percentage to 55%, unless the beneficiary presents acceptable evidence that he provides over half support to a spouse and/or dependent child. In our opinion, the evidence the beneficiary has presented to date does not satisfy this requirement. If, however, he presents additional evidence the field office believes is sufficient to show he is providing over half support to another spouse and/or child, that office must forward copies to the former spouse (or her attorney) and to the issuing court and notify both that the agency plans to reduce the withholding percentage to 55%. The former spouse may contest the reduced withholding percentage by immediately referring the matter to the issuing court for resolution

John Jay. Lee
Acting Regional Chief Counsel, Region VIII

By_____________
Yvette G. Keesee
Assistant Regional Counsel

C. PR 11-051 Garnishment of Social Security Benefits for Alimony-Utah

DATE: January 25, 2011

1. SYLLABUS

Under Section 207 of the Social Security Act, the agency is required to comply with a court order to enforce legal obligations for alimony that, on its face, conforms to the laws of the jurisdiction where it was issued. Utah law holds that the maximum withholding for alimony arrearages is the lesser of: 25% of an individual’s aggregate disposable earnings or the amount by which the individual’s aggregate disposable earnings exceed 30 times the federal minimum hourly wage in effect at the time the amounts are payable.

Under Utah R. Civ. P. 64D(l)(2)(A)-(D), a writ of continuing garnishment applies to payments from the effective date of the writ until the earlier of: 120 days; the last periodic payment; the judgment is stayed, vacated or satisfied in full; or the writ is discharged.

2. OPINION

Question Presented

You requested a legal opinion on how much the agency must withhold from the wage earner Harold’s monthly Social Security disability benefits, based on a writ of continuing garnishment for alimony issued by a Utah state court.

Short Answer

For alimony arrearages, Utah law permits the agency to withhold the lesser of the following: (1) 25% of an individual’s aggregate disposable earnings; or (2) the amount by which the individual’s aggregate disposable earnings exceed 30 times the federal minimum hourly wage in effect at the time the amounts are payable. Harold’s monthly Title II benefits total $1,813.60. Twenty-five percent of this amount is $453.40. His monthly benefits exceed 30 times the federal minimum hourly wage by $871.84. The agency may withhold the lesser of these two amounts or $453.40 from Harold’s monthly Title II benefits under the current writ of continuing garnishment from the effective date of the writ, September 30, 2010, until the earlier of the following: 120 days; the last periodic payment; the judgment is stayed, vacated or satisfied in full; or the writ is discharged.

Discussion

Background

On September 21, 2010, the Third Judicial District Court in and for Salt Lake County, State of Utah, issued a Writ of Continuing Garnishment and Instructions for Alimony. According to the writ, “[a] judgment for $43,604.00 has been entered against the judgment debtor, and the judgment debtor still owes $43,533.26.” The first page of the writ reflects that a deputy constable for Salt Lake County personally served the writ on Ryan , Assistant District Manager of the Salt Lake City Field Office, on September 30, 2010.4 According to information we received from the RSI staff, Harold’s monthly Title II benefits total $1,813.60.

Exception to the Social Security Act’s Anti-Assignment Provision

Section 207 of the Act prohibits benefits from being subject to legal process, except as expressly provided by federal law. See 42 U.S.C. § 407. One exception to this prohibition is garnishment of an individual’s Title II benefits, brought subject to a legal process, to enforce the individual’s legal obligation to provide alimony. See id. § 659(a); 5 C.F.R. §§ 581.101(a)(1), 581.103(c); POMS GN 02410.200. (No exception permits garnishment of SSI payments under title XVI.) The Agency is required to comply with a court order to enforce legal obligations for alimony that, on its face, conforms to the laws of the jurisdiction where it was issued. 5 C.F.R. § 581.305(a)(1). 5 The maximum withholding the laws of any state may authorize is limited by the Consumer Credit Protection Act (CCPA). See 15 U.S.C. § 1673. As explained below, the maximum withholding under Utah law does not exceed federal limits, and the writ, on its face, comports with Utah law.

The Maximum Earnings Subject to Garnishment under Utah Law Do Not Exceed Federal Maximum Withholding Limits

The CCPA limits withholding to 50% of an individual’s aggregate disposable earnings, if the beneficiary is supporting a spouse and/or child (other than the spouse and/or child whose support has been ordered). If the beneficiary is not supporting another spouse and/or child, the CCPA limits withholding to 60%, except the limits are 55% and 65% respectively, if such earnings are subject to garnishment to enforce a support order with respect to a prior period. See id. § 1673(b); see also 5 C.F.R. § 581.402(a)(1)-(2); POMS GN 02410.215(3). A state may provide greater protection to debtors than the CCPA, however. See POMS GN 02410.215; see also Evans v. Evans, 429 F. Supp. 580, 582 (W.D. Okla. 1976) (Federal law provides maximum earnings subject to garnishment but was not intended to preempt state garnishment laws that are more restrictive).

Under Utah law, the maximum part of an individual’s aggregate disposable earnings for the pay period that is subject to garnishment is the lesser of 25% of the disposable earnings for the pay period or the amount by which the disposable earnings exceed 30 times the federal minimum hourly wage. Utah Code Ann. §§ 70C-7-103(2)(a), (b); Utah R. Civ. P 64D(a)(1), (2). “Earnings” mean compensation paid or payable, including wages, salary bonuses, commissions, and periodic payments from a pension or retirement program. See Utah R. Civ. P. 64(a)(5). “Disposable earnings” mean that part of the earnings of an individual remaining after the deduction from those earnings of amounts required by law to be withheld. See Utah R. Civ. P. 64D(a)(4); see also Utah Code Ann. § 70C-7-103(1)(a).

A writ of continuing garnishment applies to payments to the defendant from the effective date of the writ until the earlier of the following: 120 days; the last periodic payment; the judgment is stayed, vacated or satisfied in full; or the writ is discharged. Utah R. Civ. P. 64D(l)(2)(A)-(D). “A writ is effective upon service.” Id. 64(d)(3)(A). 6

On Its Face, the Writ Comports with Utah Law

A court of competent jurisdiction, the Third Judicial District Court in and for Salt Lake County, State of Utah, issued the writ of continuing garnishment, and a Salt Lake County deputy constable properly served it on a field office manager. See 5 C.F.R. Pt. 581, App. A (noting that “[f]or the garnishment of benefits under title II of the Social Security Act, legal process may be served on the office manager at any Social Security District or Branch Office”); Utah R. Civ. P 64D; Utah R. Civ. P. 5(b) (Service and Filing of Pleadings and Other Papers); POMS GN 02410.205 (service of a garnishment order must be done in a manner prescribed by the applicable state law). The writ shows that it is to collect alimony and has enough information (full name, date of birth, and Social Security number) for the agency to identify the person whose benefit payments the writ will affect. See 5 C.F.R. § 581.203.

The Amount the Agency Must Withhold from the Wage Earner’s Title II Benefits

Utah law describes Social Security benefits as property that may be exempt, i.e., “cannot be taken to pay judgments.” Utah R. Civ. P. Form 41. Utah law also provides that “subject to the provisions of the Utah Uniform Consumer Credit Code[,] . . . [a] creditor may levy against exempt property of any kind, except unemployment benefits, to enforce a claim for . . . alimony, support, or maintenance . . . .” Utah Code Ann. § 78B-5-508(1)(a)(i).

As noted above, the maximum part of an individual’s aggregate disposable earnings for the pay period that is subject to garnishment is (1) the lesser of 25% of the disposable earnings for the pay period or (2) the amount by which the disposable earnings exceed 30 times the federal minimum hourly wage. David’s monthly Title II benefits total $1,813.60. Twenty-five percent of this amount is $454.40. His monthly Title II benefits exceed 30 times the federal minimum hourly wage by $871.84. 7 Thus, the agency may withhold the lesser amount ($453.40) from the effective date of the writ, September 30, 2010, until the earlier of the following: 120 days; the last periodic payment; the judgment is stayed, vacated or satisfied in full; or the writ is discharged.

Conclusion

Under Utah law, the maximum withholding for alimony arrearages is 25% of an individual’s aggregate disposable earnings or the amount by which the individual’s aggregate disposable earnings exceed 30 times the federal minimum hourly wage in effect at the time the amounts are payable, whichever is less. The agency may withhold $453.40 from Harold’s monthly Title II benefits, which represents the lesser amount or 25% of his aggregate disposable earnings. The agency may withhold this amount from September 30, 2010, the effective date of the writ, until the earlier of the following: 120 days; the last periodic payment; the judgment is stayed, vacated or satisfied in full; or the writ is discharged.

John Jay. Lee
Acting Regional Chief Counsel, Region VIII

By_____________
Yvette G. Keesee
Assistant Regional Counsel

D. PR 05-012 State of Utah Notice of Lien-Levy for Past Due Child Support NH-Glen (Your reference number S2D8B52:JMA)

DATE: October 15, 2004

1. SYLLABUS

Utah law permits garnishment of a debtor's earnings by ORS to enforce child support obligations. See Utah Code Ann. § 62A-11-312.5(3)(a) (2004). A writ of garnishment in Utah cannot seek more than 50% of a debtor's disposable income. See id. § 62A-11-316(4). Utah R. Civ. P. 64D(d)(vii) (2004) exempts Social Security benefits from "earnings" subject to garnishment, except when sought to satisfy child support obligations. However, notices of lien-levy, are treated separately from garnishments. Utah Code Ann. § 62A-11-304.1(h)(i) (2004) permits ORS to secure assets to satisfy past-due support by (i) intercepting or seizing periodic or lump sum payments from (A) a state or local government agency, and (B) judgments, settlements, and lotteries.

The Agency is not obligated to pay the Utah ORS in accordance with this notice of lien-levy. This notice is not expressly authorized by 42 U.S.C. §§ 659 and 666 or the accompanying regulations at 5 C.F.R. § 581 et seq., and is beyond the income withholding limits permitted by those provisions. In addition, the notice of lien-levy is unlawful under the relevant portions of the CCPA. Finally, this notice is also arguably impermissible under State law.

2. OPINION

Issues Presented

You have requested an opinion on whether SSA must comply with a notice of lien-levy issued by the Utah Office of Recovery Services (ORS) for past due child support.

Short Answer

We do not believe that the notice of lien-levy against back benefits of this claimant should be honored because the notice is not expressly authorized by the modification of the anti-assignment provision at 42 U.S.C. § 659 and accompanying regulations at 5 C.F.R. § 581 et seq. The notice, therefore, is beyond the income withholding permitted by those provisions, is unlawful under the relevant portions of the Consumer Credit Protection Act (CCPA), 15 U.S.C. §§ 1671-1677, and is arguably impermissible under State law.

Facts

The available facts in this case indicate that after an initial determination finding that Glen was disabled as of February 2004, the Agency released his past due benefits to him on August 31, 2004. At this time, Glen receives $946 each month in DIB. On September 7, 2004, a week after Glen's past due benefits were released, ORS served a "Notice of Lien-Levy" on the Social Security Office in Salt Lake City, Utah. The notice demanded payment of $147,716.70 from Glen's DIB for past due child support (Notice of Lien-Levy from ORS, September 3, 2004).

Legal Analysis

Federal Law

The Social Security Act prohibits alienation or assignment of benefits, such as execution, levy, attachment or garnishment. See 42 U.S.C. § 407(a). However, there are two narrow exceptions to the anti-assignment provision. First, Title II benefits are subject to withholding in accordance with State laws enacted pursuant to subsections (a)(1) and (b) of 42 U.S.C. § 666 (2000), and to any other "legal process" for the enforcement of alimony or child support obligations. See id. § 659(a). Subsections (a)(1) and (b) of 42 U.S.C. § 666 do not mention any procedure for collecting alimony or child support other than income withholding subject to the percentage limitations of the CCPA, codified at 15 U.S.C. § 1673. "Legal process" is defined as "any writ, order, summons or similar process in the nature of garnishment" issued by a court or administrative agency. See 42 U.S.C. § 659(i)(5)(A)(i) (emphasis added). The regulations at 5 C.F.R. § 581 et seq., and POMS also do not authorize any form of Title II benefits assignment other than income withholding in the nature of garnishment for the limited purposes stated.

Second, 26 U.S.C. §§ 6331 and 6334(c) permit the Internal Revenue Service to levy upon Social Security benefits only for collection of Federal income taxes.

Utah State Law

Utah law permits garnishment of a debtor's earnings by ORS to enforce child support obligations. See Utah Code Ann. § 62A-11-312.5(3)(a) (2004). A writ of garnishment in Utah cannot seek more than 50% of a debtor's disposable income. See id. § 62A-11-316(4). Utah R. Civ. P. 64D(d)(vii) (2004) exempts Social Security benefits from "earnings" subject to garnishment, except when sought to satisfy child support obligations. However, notices of lien-levy, are treated separately from garnishments. Utah Code Ann. § 62A-11-304.1(h)(i) (2004) permits ORS to secure assets to satisfy past-due support by (i) intercepting or seizing periodic or lump sum payments from (A) a state or local government agency, and (B) judgments, settlements, and lotteries.

Discussion

We do not believe that the Agency is obligated to pay the Utah ORS in accordance with this notice of lien-levy. This notice is not expressly authorized by 42 U.S.C. §§ 659 and 666 or the accompanying regulations at 5 C.F.R. § 581 et seq., and is beyond the income withholding limits permitted by those provisions. In addition, the notice of lien-levy is unlawful under the relevant portions of the CCPA. Finally, this notice is also arguably impermissible under State law.

The modification of the anti-assignment provision at 42 U.S.C. § 659 allows income withholding "in accordance with State law enacted pursuant to subsections (a)(1) and (b) of section 666 of this title . . . and to any other legal process brought[] by a State agency administering a program under a State plan approved under this part." See 42 U.S.C. § 659(a) (emphasis added); see also Memorandum, State of Utah Notices of Lien-Levy for Past Due Support, RCC Region VIII (Ridgell-Boltz) to ARC, SSA, April 30, 2004. Likewise, the regulations state that legal process must be accomplished pursuant to State procedures in effect pursuant to subsections (a)(1) and (b) of section 666 of Title 42. See 5 C.F.R. § 581.202(b). As mentioned previously, subsections (a)(1) and (b) of section 666 only mention income withholding subject to the limitations of the CCPA, and neither the statute nor the regulations mention any other mechanism by which States or private parties can seize Social Security benefits to satisfy child support obligations. See 42 U.S.C. § 666(a)(1), (b); 15 U.S.C. § 1673(b); see also 5 C.F.R. § 581 et seq. Income withholding permissible under section 659 must not exceed the limits of section 1673(b) of the CCPA. See 42 U.S.C. § 666(b)(1). In this notice, the amount demanded, $147,716.70, exceeds any limitations for income withholding.

Moreover, "any other legal process" is defined as any "writ, order, summons or similar process in the nature of garnishment." See 42 U.S.C. § 659(i)(5)(A)(i) (emphasis added). For the following reasons, we do not believe that the notice of lien-levy in this case is "in the nature of garnishment." While garnishments and notices of lien-levy are both procedures by which property of an obligor in possession of a third party is sought to satisfy child support obligations, the similarities end there. See Utah Code Ann. §§ 62A-11-312.5, 62A-11-304.1(h)(i). A garnishment is the only method the Utah statutes permit to seize "earnings," the definition of which expressly includes Social Security benefits when sought for satisfaction of child support obligations. Furthermore, as discussed above, a notice of lien-levy is a one-time attempt to seize specific property in its entirety, while garnishment is limited to 50% of the obligor's disposable earnings, and when used to enforce child support can be "continuing" over a period of time until the obligation is satisfied. See id. §§ 62A-11-304.1(h)(i), 62A-11-316(4); see also Utah R. Civ. P. 64D(a)(iii), (d)(vii), (v), 69(b). Therefore, we do not believe that this notice of lien-levy is "in the nature of garnishment," insofar as it seeks a one-time seizure of the entire amount of Glen's back due benefits without any regard to any income withholding limitations..

Because the modification of the anti-assignment provision or waiver of sovereign immunity does not authorize any other procedure other than those in the "nature of garnishment" for income withholding of Social Security benefits, subject to CCPA limitations in order to satisfy child support obligations, and because the notice of lien-levy is "not in the nature of garnishment," we believe that the Agency is not required to honor it. No legal proceeding, including garnishment, may be brought against the United States absent a waiver of sovereign immunity. See Millard v. United States, 916 F.2d 1, 2 (Fed. Cir. 1990) (citing United States v. Mitchell, 445 U.S. 535, 538 (1980)).

This notice also may be an impermissible means of seizing Social Security benefits under State law. As discussed above, under Utah law, ORS is authorized to "secure assets to satisfy past-due support" by "intercepting or seizing periodic or lump-sum payments" from "a state or local government agency, including unemployment compensation, worker's compensation, and other benefits" and "judgments, settlements, and lotteries." See Utah Code Ann. § 62A-11-304.1(h)(i). Social Security Title II benefits are not from "a state or local government agency," nor are they a judgment, settlement or lottery. In the case of this claimant, he receives a monthly benefit of $946 per month, which cannot be classified as a "judgment, settlement or lottery." Therefore, this notice of lien-levy against Glen's lump sum back benefits payment is arguably also improper under Utah law.

Conclusion

Accordingly, we advise that the Agency is not required to honor this notice because it (a) is not expressly authorized by 42 U.S.C. §§ 659 and 666 or the accompanying regulations at 5 C.F.R. § 581 et seq.; (b) violates the provisions of the CCPA, 15 U.S.C. §§ 1671-1677; and (c) is arguably impermissible under State law.

Deana R. Etel-Lombardi
Regional Chief Counsel, Region VIII

By___________
Laura Ridgell-Boltz
Assistant Regional Counsel


Footnotes:

[1]

Electronic signatures on documents retrieved from or produced from the Courts Electronic Filing System are valid pursuant to the Utah Uniform Electronic Transactions Act. See Utah Code Ann. § 46-4-201. Service by mail or hand-delivery is permissible under Utah law. See Utah R. Civ. P. 5(b)(1)(A)(iv), (v); see also POMS GN 02410.205 (service of a garnishment order must be done in a manner prescribed by the applicable state law).

[2]

The CCPA limits withholding to 50% of an individual’s aggregate disposable earnings, if the beneficiary is supporting a spouse and/or child (other than the spouse and/or child whose support has been ordered). If the beneficiary is not supporting another spouse and/or child, the CCPA limits withholding to 60%, except the limits are 55% and 65%, respectively, if such earnings are subject to garnishment to enforce a support order with respect to a prior period. See 15 U.S.C. § 1673(b).

[3]

Instructions for calculating 30 times the federal minimum hourly wage are set forth in garnishment forms/interrogatories related to earnings: $7.25 x 30 x 4.33 weeks = $941.76. As explained in more detail herein, the incorrect interrogatories were attached to the writ in this case. The correct interrogatory (for earnings) is available at: http://www.utcourts.gov/resources/forms/garnishment/docs/07_Garnishee_Answers_to_Interrogatories_for_Earnings.pdf. ---------------

[4]

Within fifteen days of the date of service of a court garnishment order for support, federal law requires the agency to send written notice to the debtor that the order has been served. 42 U.S.C. § 659(c)(2)(A). Under Utah law, within seven business days of service of the writ, the garnishee’ is responsible for answering the interrogatories accompanying the writ; serving the answers on the plaintiff; and serving the writ, the answers to the interrogatories, and the notice of exemptions on the debtor (defendant). See Utah R. Civ. P. 64D(g)(1)-(3).

[5]

If, on its face, the order does not conform to the laws of the jurisdiction where it was issued, the agency must respond directly to the court, setting forth its objections to compliance with the order and informing the party who served the order that the legal process will not be honored. See 5 C.F.R. § 581.305(c); see generally POMS NL 00703.728.

[6]

Within seven days after the end of each payment period, the garnishee shall with respect to that period: answer the interrogatories under oath or affirmation; serve the answers to the interrogatories on the plaintiff, the defendant and any other person shown by the records of the garnishee to have an interest in the property; and deliver the property as provided in the writ. Id. 64D(l)(3)(A)-(C).

[7]

According to the calculation instructions set forth in the writ for a monthly payment, 30 times the federal minimum wage is $941.76 ($7.25 x 30 x 4.33 weeks = $941.76).


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/1504015049
PR 04015.049 - Utah - 02/26/2014
Batch run: 02/26/2014
Rev:02/26/2014