Can My Workers’ Compensation Benefits Be Garnished?

At Silverman, McDonald & Friedman, our Delaware workers’ compensation lawyers work to protect benefits. If you are struggling with your claim, contact us in Seaford, Newark, or Wilmington to schedule a consultation.

Garnishment allows an employer to withhold some of your pay, and then send it directly to a creditor. When you file a workers’ compensation clam, your medical bills are typically paid to your health providers. Vocational rehabilitation costs are paid directly to teaching and related providers. As such, they cannot be garnished because they are already being paid.

But what about the weekly wage replacement portion of your benefits – the compensation that is supposed to assist you if you have been deemed partially, temporarily, or totally disabled? Can that be garnished?

Generally speaking, it cannot.

Federal wage garnishment protection in workers’ compensation cases

The Consumer Credit Protection Act protects different types of income from garnishment from creditors. One of these types is workers’ compensation. (For the record, Social Security Disability Insurance income and unemployment benefits are generally also protected from garnishment by creditors.)

The reason workers’ compensation benefits are protected from garnishments – even though the disability benefits are meant to replace lost income – is twofold: those benefits are payable because of an injury, and workers’ compensation law was designed to limit lawsuits. Employees are giving up their rights to full wage losses (generally they receive 66.67% and not 100%) and their right to payment for pain and suffering. If injured workers had those additional compensation amounts, they’d have more funds to pay creditors.

Delaware’s exemptions for wage garnishment

The state of Delaware exempts workers’ compensation benefits from garnishment except for child support. Once your child support obligation has been fulfilled, however, the Division of Child Support Services will terminate the garnishment order.

How much of my compensation can be garnished?

The Consumer Credit Protection Act protects 75% of a debtor’s disposable wages from garnishment. Disposable wages are generally the amount left after FICA taxes are taken out. Under federal law, up to 25% of your disposable income OR anything you earn that exceeds 30% of the federal minimum wage could be garnished.

Delaware’s laws, however, are different. The state protects 85% of all disposable income, so the amount that can be garnished is less. Since the state only allows garnishment for child support, the amount garnished would have to be based on your weekly wage replacement benefits.

Once you return to work, however, all bets are off. Your wages could be garnished by more than just one creditor.

Injured employees sacrifice a lot just in order to get healthy after a workplace injury. They shouldn’t have to worry that creditors will take part of their settlement or wage payments if they are entitled to work injury benefits. At Silverman, McDonald & Friedman, our Delaware workers’ compensation lawyers have more than 100 years of combined experience. We help workers fight for all the benefits they deserve. Please call us at 302.888.2900 or fill out our contact form. to discuss your case. We have offices in Wilmington, Newark, and Seaford.