FBP/Garnishment Audit Question

Would this be considered a federal benefit payment and thus protected from garnishment?

A direct deposit from - AGRI TREAS 310/FED SAL

I've never seen a fed deposit described like this one.

Thanks.

Fed Sal looks like "Salary." Payroll is not one of the defined benefits in the regulation.

Benefit agency means the Social Security Administration (SSA), the Department of Veterans Affairs (VA), the Office of Personnel Management (OPM), or the Railroad Retirement Board (RRB).

Without the "XX" as part of that description (and a "2" in the Originator Status Code field of the match header record for the transaction), it's by definition not a "benefit payment" for the purposes of Treasury's "Garnishment of Accounts Containing Federal Benefit Payments" regulation.

For example, my monthly Social Security direct deposit shows "XXSOC SEC SSA TREAS 310" as the payment description.

John, following you thoughts, are tax refunds "federal benefit payments"? Or is there guidance on this, such as what payments will include the XX? Thanks!

Tax refunds are not federal benefit payments.

Social security, welfare, VA benefits and Railroad retirement benefits are generally what you will see with the XX's. Some of the federal stimulus payments were protected and some weren't depending on the way Congress wrote the laws appropriating the various payments.

Brian, thanks for your help.

Treasury made the boundaries of its regulation really clear -- to be protected by the Treasury Garnishment of Accounts Containing Federal Benefits Payments rule, transactions must include the "XX" in positions 54-55 of the Company Entry Description field and "2" in the Originator Status Code field of the Batch Header Record of the direct deposit entry.

If you don't see the "XX" in the Company Entry Description field of the ACH record, it's not covered.

There have been three waves of EIP payments during the pandemic -- two in 2020 and the third in 2021. The second wave included direct deposits protected by the "XX" because Congress declared they would be protected. The other two waves didn't include the "XX" in their ACH records.

So, rather than concern yourself with the type of payment and which agency sent it, look at the Company Entry Description field for the "XX". If it's there, apply the rule. If it's not, don't apply it.