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Can your ERISA disability benefits be garnished?

Attorney Stephen JessupAuthor: Attorney Stephen Jessup

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.

There are 4 opinions so far. Add your comment below.

John A.:

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?

Attorney Stephen Jessup:


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.


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.

Attorney Rachel Alters:

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.

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