Can they take out money owed to Social Security from an insurance fund payable to the beneficiary?

Question

My mother owes Social Security about $140,000 in back payment (due to years of an error on their end). Nevertheless, she worked out a deal w/them to pay them back, but believes that she will be paying them back every month until she dies. Which got me to wondering. If she still owes when that time comes, can they take the amount owed out of her life insurance beneficiary payment? They told her that they cannot set up to have payments come from her monthly pension checks because that is a private fund rather than a goverment fund check. So, does this mean that they can't take out money owed from the insurance check? I was just wondering how this worked. Does anyone know??

Answer 1

Wait, you mean, will her life insurance payout be attached? Only if the beneficiary is her estate. If the beneficiary is a person, that PERSON'S payment cannot be attached.

However, SS can put a lein against her bank account, and sweep her account daily, if they want to. Then when a private check gets deposited to the account, no matter WHO it's from, the money gets "attached" and swept out to pay back her debt.

They can't take money from an insurance check. But once the check is deposited, it's not an insurance check any more - it's HER MONEY, and they CAN take that.

Answer 2

If her life insurance in made payable to a PERSON instead of her estate then no. If the insurance goes to her estate then they become a creditor.

She could direct her bank to send an automatic payment to SS when it gets her other pension amount.

Answer 3

They cannot get at the funds from a private insurance company; they can only withhold funds from government accounts. HOWEVER< if your mother passes away, the SS is still entitled to the return of the rest of the overpayments, and her estate will be liable to pay that money back.

http://www.ssa.gov/OP_Home/handbook/handbook.19/handbook-1906.html