A New Social Security Garnishment May Be on the Table in 2026 — and There Are 2 Legal Ways Most Retirees Can Avoid It

Social Security is the main source of income for most retired people, and without it, many of them would not be able to survive. It is more than just a monthly payment it is the financial base that keeps millions of seniors above poverty.

In 2023, experts found that Social Security lifted 22 million Americans above the poverty line, including more than 16 million people aged 65 and older. Without it, the poverty rate for seniors would jump from about 10% to more than 37%.

But recently, many changes have been made by President Donald Trump and his administration, and these changes could affect how much money people actually receive each month.

Trump and his team have increased the clawback rate for Social Security overpayments. During the pandemic, former President Joe Biden reduced the amount the government could take back if they accidentally overpaid someone dropping it from taking 100% of a person’s check to only 10%.

But this year, the Social Security Administration announced that it would return to taking 100%. After public anger, they reduced it again, but this time only to 50%. Even at 50%, the government is taking five times more than before. This means millions of people who were overpaid through no fault of their own could now lose half of their monthly benefit.

Another change involves paper checks. Trump signed an order requiring all remaining paper-check recipients to switch to direct deposit or a government prepaid card by September 30. Even though almost everyone already uses electronic payments, around 500,000 people still had to make the switch or risk not getting their money.

Trump’s trade policies have also affected Social Security. Because his tariffs raised prices on certain goods, inflation went up slightly. Social Security checks cannot go down even if prices fall, so this inflation increase sometimes called the “Trump bump” became permanently built into the 2026 cost-of-living adjustment. That means Social Security payments will stay slightly higher going forward.

But the biggest concern for many retirees is the possibility of another kind of garnishment returning one that affects people who owe federal student loans.

Many people think student loans only affect younger borrowers, but a growing number of Americans are entering retirement with unpaid student debt. Millions still owe money, and more than 450,000 Social Security recipients are behind on their student loans. These people were at risk of having up to 15% of their Social Security checks withheld, as long as they were left with at least $750.

The Department of Education paused these garnishments for a few months in 2024, saying they would resume “later in the summer.” Summer passed and they did not resume, but the wording made it clear that this was only a delay, not a cancellation. Because of that, many experts believe the 15% garnishment will likely restart in 2026.

If that happens, many retirees would have legal ways to avoid losing part of their monthly check.

One option is the Total and Permanent Disability (TPD) discharge. If a borrower is permanently disabled, they may qualify to have their student loans cancelled. About 22% of older Social Security beneficiaries with student loans report having a permanent disability, meaning they could apply for TPD.

The second option is applying for a financial hardship exemption. More than 80% of older borrowers who are in default would meet the income and expense requirements needed to prove financial hardship. But surprisingly, very few people apply for it. A government report found that fewer than 10% of eligible borrowers requested a hardship exemption, even though it could stop the garnishment entirely.

So even if garnishments return in 2026, most older people would still have ways to protect their benefits but they must apply and submit the required documents.

Finally, many people don’t realize that there are legal strategies for increasing their Social Security income. Some of these methods could add up to an extra $23,760 a year if used correctly. Most Americans are behind on saving for retirement, so learning how to maximize Social Security could make a big difference in living comfortably later in life.

In simple terms, Social Security is changing, and some of these changes could reduce what people get each month. But there are also ways to protect yourself and even increase your benefits — if you know what to do and act early.