Social Security serves as a lifeline for millions of older Americans today. And many recipients would not be able to make ends meet without those monthly benefits.
But it's not a given that the monthly Social Security payment you're supposed to collect will land in your bank account in full, without a hitch. Under certain circumstances, you could be at risk of losing some of that money. Following a recent court ruling, your Social Security income could actually start working against you in one specific circumstance.
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Can your ex-spouse take your Social Security?
Divorced people who fall behind on their alimony payments risk having their Social Security checks garnished to meet that obligation. But recently, a Colorado court ruled that Social Security can be counted as income for the purpose of calculating how much money divorced people owe their ex-spouses in alimony. In light of this, seniors on Social Security who owe money to a former spouse could see their alimony payments increase if it's determined that their monthly benefits should count as income for the purpose of calculating alimony.
In many cases, ex-spouses are also entitled to Social Security spousal benefits based on their former partners' records. The requirement is to be divorced for 10 years or more to qualify for spousal benefits, though. Recent older divorced people may be reliant on alimony -- and entitled to it -- when there's a large discrepancy in income.
However, if your ex is eligible for spousal benefits from Social Security, that won't impact the amount of money you collect each month. It's not as if that sum is deducted from your monthly payments.
To put it another way, don't confuse alimony with spousal benefits. One is something you're required to pay, while the other is something the Social Security Administration is required to pay.
It's not just alimony payments that put you at risk of losing benefits
Alimony isn't the only obligation that might trigger a garnishment of your Social Security benefits. If you owe money in child support, you risk that same fate.
The IRS also has the right to garnish your Social Security benefits if you owe back taxes and have made no attempt to pay. To be clear, this generally will not happen if you're repaying your tax debt in installments and are current on your plan. Rather, it's when you blow off your tax debt completely that Social Security garnishment becomes possible.
The same holds true for federal student loans. Failing to repay them on schedule could have the federal government going after your Social Security.
As such, you can't assume that your Social Security benefits are safe from garnishment and that they won't count as income for the purpose of calculating alimony. If you're going through a divorce or dealing with the aftermath of one, it pays to enlist the help of a good attorney to make sure your rights are protected.
Staying current on tax and student debt obligations can also prevent a scenario where you don't get your complete monthly Social Security check. Reach out to the IRS or your student loan servicer if keeping up with your obligations has become a struggle. There may be solutions that don't involve losing a chunk of your Social Security income.
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