Whether Social Security disability insurance (SSDI) benefits and SSI benefits must be shared between spouses when a marriage ends is an issue that often comes up during divorce. There are two issues here: whether disability benefits need to be split when the spouses' property is divided, and whether disability benefits are considered when awarding alimony/spousal support.
Are Disability Benefits Considered a Marital Asset?
The term "marital asset" is used to describe property that was acquired by both parties during the course of the marriage. How marital assets are divided during a divorce depends on whether the state follows the principal of community property (each party gets a 50/50 share) or of equitable division (property is divided “fairly,” but not necessarily equally, based on numerous factors as defined by state law.)
SSDI and SSI benefits are awarded special protection from certain civil proceedings under the Social Security Act ("Act"). The Act states that disability benefits are not subject to "levy or attachment." The majority of state courts have interpreted this to mean that SSDI benefits are not marital property. This means that if a person establishes a bank account that contains only disability benefit proceeds, such as the lump-sum back pay for an SSDI claim, the funds would be excluded from any court-ordered property division. However, in community property states, if the funds were deposited into a family account, or “co-mingled" and used for communal purposes, the funds would most likely be considered marital property and would be split equally.
In states that employ equitable division to divide marital property, the courts usually consider disability payments or lump-sum awards in calculating the fair distribution of assets. For example, if you received a $20,000 disability back-pay award that you held in a separate account, even though the court could not divide this, it would take the amount into consideration when, for example, allotting proceeds to the parties from the sale of the marital home.
Are Disability Benefit Payments Considered When Calculating Alimony?
SSDI benefits are generally considered income when determining alimony or spousal support awards. SSI payments are not.
Can My Disability Payments be Garnished to Pay Court-Ordered Alimony?
If you are responsible for court-ordered alimony payments and have won a claim for disability, your SSDI payments can be garnished to satisfy your spousal support obligation. Garnishment is a way to collect money owed on a judgment by ordering the payor (Social Security) to pay the money directly to the person to whom it is owed. This applies to SSDI benefits only, and not to SSI.
Once the agency that oversees alimony payments in your state is served an order for garnishment or other notice (usually by the party to whom alimony is paid), the agency will send you a copy of the documents within 15 days. Then, within 30 days after the agency was served the order for garnishment, the agency will withhold any available funds needed to comply with the order.
The agency that handles court-ordered disbursement of alimony payments varies from state to state. In Maryland, for example, payments are processed and distributed by the Office of Child Support Enforcement. In California, the agency is the Office of Child Support Services.