Can your ERISA disability benefits be garnished?

Attempts to garnish disability benefits for outstanding debts are not uncommon. However, depending on the basis for seeking garnishment, the amount that may be garnished could be limited under the Consumer Credit Protection Act.

In an interesting recent decision from the United States Court of Appeals for the 8th Circuit in United States of America v. Joyce Ashsraft, the Court reviewed for the first time whether disability benefits would be considered “earnings” under the Consumer Credit Protection Act. According to the Act “Earnings” is defined as:

The term “earnings” means compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise, and includes periodic payments pursuant to a pension or retirement program.

The Court reasoned that the benefits were a direct component of the compensation provided to Ashcraft by her employer in return for the personal services rendered as an employee prior to her disability. As such, the Court held that the disability payments received constituted “compensation paid or payable for personal services” that are “denominated… otherwise” and were therefore subject to the Act’s limitations on garnishment.

Is there an attempt to garnish your disability benefit?

It is important to note that this ruling was case specific and has not been adopted by Courts throughout the country. Additionally, it is important to remember that the Consumer Credit Protection Act would not insulate disability benefits from all garnishment, but, if applicable, would only limit the amount of the benefit that could be garnished. If a third party is attempting to garnish your disability benefits please feel free to contact our Office to determine how we may be able to assist you.

Attorneys Dell and Schaefer had no involvement in the preceding case.

Comments (4)

  • Matt, they are entitled to be repaid any overpaid amount you received from MetLife while you were on claim. If MetLife never paid you them you won’t owe them anything.

    Rachel Alters Jun 11, 2019  #4

  • I was recently informed that MetLife was dropping my LTD coverage as of last week. A few days later I received a decision on SSDI and was granted full disability benefits. Does Metlife have the ability to pursue my back pay from SSDI even if they have dropped me from my policy? I would view this as they have ended their agreement with me and are not entitled to anything. I find it interesting the social security qualified me as disabled but Metlife said the opposite.

    Matt Jun 11, 2019  #3

  • John,

    Based on your indication that you would receive 60% of $635, you would receive $381.00. However, I would suggest you contact your claims manager at Unum to verify your benefit amount.

    Stephen Jessup Jun 11, 2014  #2

  • I was approved for disability in the amount of 1702 dollars and on short term disability. With Unum no back pay. I was approve within 6 months. My LTD will kick in August at 60 per cent of 635 dollars. What will I get from Unum?

    John A. Jun 10, 2014  #1

Leave a comment or ask us a question

Questions About Hiring Us

Do you work in my state?

Yes. We are a national disability insurance law firm that is available to represent you regardless of where you live in the United States. We have partner lawyers in every state and we have filed lawsuits in most federal courts nationwide. Our disability lawyers represent disability claimants at all stages of a claim for disability insurance benefits. There is nothing that our lawyers have not seen in the disability insurance world.

What are your fees?

Since we represent disability insurance claimants at different stages of a disability insurance claim we offer a variety of different fee options. We understand that claimants living on disability insurance benefits have a limited source of income; therefore we always try to work with the claimant to make our attorney fees as affordable as possible.

The three available fee options are a contingency fee agreement (no attorney fee or cost unless we make a recovery), hourly fee or fixed flat rate.

In every case we provide each client with a written fee agreement detailing the terms and conditions. We always offer a free initial phone consultation and we appreciate the opportunity to work with you in obtaining payment of your disability insurance benefits.

Do I have to come to your office to work with your law firm?

No. For purposes of efficiency and to reduce expenses for our clients we have found that 99% of our clients prefer to communicate via telephone, e-mail, fax, sessions, or Skype. If you prefer an initial in-person meeting please let us know. A disability company will never require you to come to their office and similarly we are set up so that we handle your entire claim without the need for you to come to our office.

How can I contact you?

When you call us during normal business hours you will immediately speak with a disability attorney. We can be reached at 800-682-8331 or by email. Lawyer and staff must return all client calls same day. Client emails are usually replied to within the same business day and seem to be the preferred and most efficient method of communication for most clients.

Dell & Schaefer Client Reviews   *****

Mike F. (Florida)

I was fortunate enough to have Rachel Alters handle my LTD appeal in 2014. I took 180 days and when all was said and done it was 266 pages long! The detail was amazing and my denial was immediately overturned. I strongly suggest that an individual doesn’t go it alone in this process. I think the other great advantage to having her handle it is I can reach out to her anytime I have any issues or questions with the insurance company and she deals directly with them.

I recently had an issue where they were not waiving my premium for the life insurance I ported when I had to stop working. Rachel not only got my premiums waived going forward, she got me a refund of all my premiums going back several years. One of the smartest things I’ve done was to contact Dell & Schaefer when my LTD was denied.

***** 5 stars based on 202 reviews

Speak With An Attorney Now

Request a free legal consultation: Call 800-682-8331 or Email Us