Michigan Laws on Garnishment Exceptions
- Wage garnishment can be a trying experience, but some states offer limitations on the process.chek image by Alexey Klementiev from Fotolia.com
In the United States, individuals are protected by law from garnishments of more than 25 percent of their disposable earnings. [REF 2, graf 5] These protections are in the form of certain exceptions or "exemptions" that prohibit some forms of income from being taken from a paycheck. According to the U.S. Department of Labor, "disposable earnings" are defined as wages after the requisite deductions for federal, state and local taxes; unemployment and retirement.[REF 4, graf 5] Michigan, however, has additional protection from garnishment. - In Michigan, pension is protected from garnishment for state employees, public school workers, police and fire personnel. Additionally, most retirement benefits, IRAs included, are also protected from garnishment. (REF 1, "Garnishment Exemptions")
- Additional exemptions are offered to various types of public benefits or assistance. Specifically, worker's compensation, unemployment benefits, types of aid to families with dependent children, compensation to victims of crime welfare and aid or benefits to war veterans are all exempt in many situations for residents of Michigan.
- Though federal statute does not protect insurance policies, annuities and other forms of benefits from wage garnishment, Michigan law does, in some cases. Fraternal society benefits, various life insurance policies or annuities--if the policies state they cannot be used to pay creditors--and health insurance or disability are also covered in Michigan.
- As mandated by Federal law, Social Security compensation (FICA) is protected from wage garnishment. The exception to this is in the event of tax liens due to back payment of Federal taxes. [REF 1, graf 4] Further, Social Security may be taken for payment of child support or alimony.
