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Updated Dec 04, 2024

In This Section

 
This section contains the following topics:
 
Topic
Topic Name
1
2
 

 

1.  General Information About Garnishments

 

 

Introduction

 

This topic contains general information about garnishments, including

Change Date

   April 10, 2015

VII.iii.1.C.1.a.  Definition:  Garnishment

 
A garnishment is a legal procedure, authorized by a court order, by which a creditor can collect what a debtor owes by reaching the debtor’s property when the debtor does not possess the property.

VII.iii.1.C.1.b.  Legal Authority for Garnishing VA Benefits

 
There is no statutory prohibition against the garnishment of military retired pay (MRP) when the Veteran is in receipt of Department of Veterans Affairs (VA) disability compensation.
 
Under Public Law 95-30, a Veteran’s disability compensation may be garnished in order to pay alimony or child support pursuant to a court order only if the Veteran receives disability compensation in lieu of an equal amount of MRP, in accordance with a total or partial MRP waiver.  In these cases, under 5 CFR 581.103, finance activity and the Veterans Service Center (VSC)
  • withhold disability compensation, and
  • make a payment in compliance with the garnishment order for certain categories of payees.
Reference:  For more information on the responsibilities of finance activity and the VSC see, M21-1, Part VII, Subpart iii, 1.C.2.

 

2.  Processing a Garnishment Order

 

 

Introduction

 
This topic contains instructions for processing a garnishment order that involves a Veteran who is receiving disability compensation in lieu of MRP, including

Change Date

  
December 4, 2024

VII.iii.1.C.2.a.  Actions to Take Upon Receipt of a Garnishment Order

 
Upon receipt of any court garnishment order involving a Veteran who receives VA disability compensation in lieu of MRP, deliver a copy of the court order to the local Finance Officer (FO).
 
Take the additional steps described in the table below if the Veteran resides within the jurisdiction of another regional office (RO).
 
Step
Action
1
Download a copy of the garnishment order from the Veteran’s electronic claims folder (eFolder).
2
E-mail the garnishment order to the FO at the RO with jurisdiction over the Veteran’s place of residence.
3
Input a note into the claims-processing system indicating that the garnishment order has been received and forwarded to the FO referenced in Step 2.
 
Note:  The RO that initially received the garnishment order should not request a transfer of the claims folder unless it is located at
  • the Records Management Center, or
  • a Federal records center. 

VII.iii.1.C.2.b.  Finance Activity Responsibilities With Regard to Garnishment Orders

 
The table below describes the actions an FO takes when processing a garnishment order.
 

Stage
Description

1
The FO reviews the claims folder to determine initial withholding activity under 5 CFR 581.103.
2
The FO
  • notifies the Veteran of the pending garnishment action, and
  • provides the Veteran with
    • a copy of the garnishment order
    • a description of the garnishment process, and
    • information about
      • monthly garnishment limitations, and
      • decision review rights.
3
Under either of the following circumstances, the FO refers the garnishment order to District Counsel:
  • the garnishment order
    • is not from State Child Enforcement Agency, and
    • was not submitted on OMB Form 0970-0154, Income Withholding for Support, or
  • the Veteran is subject to more than one garnishment order at a time (not including amendments).
4
The FO takes the actions described in the table below and works with District Counsel to resolve any questions that arise.
 
Important:  If the FO referred the garnishment order to District Counsel in Stage 3, the FO takes the actions described in the table below after District Counsel has completed its review of the order and provided guidance to the FO.
 
If the garnishment order …
Then the FO …
involves a dependent on the Veteran’s award
forwards the order to the VSC.
does not involve a dependent on the Veteran’s award
arranges withholding and payment from the Veteran’s award via the Enterprise Management of Payments, Workload, and Reporting for VA (eMPWR-VA).
 
 

VII.iii.1.C.2.c.  VSC Responsibilities With Regard to Garnishment Orders

  
When a VSC receives a garnishment order from an FO because the order involves a dependent on a Veteran’s award, the authorization activity processes the garnishment as an apportionment.
 
Decision notice must be sent separately to the Veteran and to the dependent.  The decision notice must inform them, in addition to the required elements discussed in M21-1, Part VI, Subpart i, 1.B.1.b and M21-1, Part VI, Subpart i, 1.B.4.a, that
  • they may appeal to the Board of Veteran’s Appeals regarding the
    • withholding accuracy, and
    • effective date, but
  • they may not appeal the provisions or legality of the garnishment order.
Reference:  For more information on processing apportionments in the Veterans Benefits Management System – Awards, see the VBMS Awards User Guide. 

VII.iii.1.C.2.d.  Responsibility for Making Delinquent and Recurring Payments and Notifying the Veteran

 

If the garnishment order mandates a specific amount be paid (a delinquent payment) with

  • no recurring payments, the FO
    • makes the delinquent payment, and
    • notifies the Veteran, or
  • recurring payments, the FO
    • makes the delinquent payment
    • awards recurring payments via eMPWR-VA, and
    • notifies the Veteran.

VII.iii.1.C.2.e.  Handling Changes in the Amount of Disability Compensation or MRP

 
If VA is garnishing a Veteran’s disability compensation, and the amount of disability compensation or MRP to which the Veteran is entitled changes (for reasons other than a cost-of-living adjustment), the authorization activity reviews the claims folder to determine if action to adjust the garnishment may be necessary.
 
If adjustment of the garnishment is necessary,  
  • download relevant documentation from the Veteran’s eFolder, and
  • e-mail the documentation to the local FO.
Note:  Complete all actions locally even if the garnishment order was originally processed elsewhere.