OPM has published interim rules effective May 1 regarding garnishment of benefits, including federal retirement benefits, Social Security, veterans benefits and certain other benefits that are paid through direct deposit, as most now are.

Creditors and debt collectors are often able to obtain court orders garnishing funds in an individual’s account, OPM said in a Federal Register notice. To comply with court garnishment orders and preserve funds subject to the orders, financial institutions often place a temporary freeze on an account upon receipt of a garnishment order and remit the garnished funds to the court or creditor. “Although state laws provide account owners with an opportunity to assert any rights, exemptions, and challenges to the garnishment order, including the exemptions under applicable federal benefits laws, the freezing of funds during the time it takes to file and adjudicate such a claim can cause significant hardship for account owners,” it said.

The rule requires financial institutions that receive such a garnishment order to determine the sum of such federal benefit payments deposited to the account during a two month period, and to ensure that the account holder has access to an amount equal to that sum or to the current balance of the account, whichever is lower.