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jenm ✭✭
edited November 2010 in General Payroll Topics
I have an employee who is currently under a child support and garnishment order. He is trying to increase his retirement contribution to reduce his garnishable wages so that he does not have enough to garnish.

I thought they were not allowed to change their deductions when they were being garnished. I can not find anything to support my thinking.

Can you help clarify for me?

Thank you.


  • That is true for IRS levies. Unless the creditor garnishment specifically prohibits it, though, don't know that he couldn't. I always suggest reading the orders carefully, word for word. I'm not as concerned about the creditor garnishment as I would be about the child support order, however. If this increase would mean that he couldn't make the full CS amount, I'd be calling the court; parents who try not to pay for their own children rather pi$$ me off. :evil:
  • d26k
    d26k ✭✭✭
    Does the employer and/or plan have a process for changing the contribution? Maybe there are some hoops that have to be jumped through, or a time frame issue which can give you more time to research and meet the law.

    My first thought is unless the retirement is part of a "state employee" retirement system, it is part of disposable, increasing it would not reduce garnishment.
  • I agree with David. I don't see how changing retirement will do what he wants. Unless you are currently calculating his CS and garnishment wrong.
  • The wording on the garnishment is... 15% of defendants non-exempt gross wages. Non-exempt gross wages are wages remaining after deductions for pension or retirement plan.

    Wouldn't that mean that if he changed his 401k contribution it would change his non-exempt gross wages?
  • Well that's the weirdest definition I've heard lately. What state are you in? What kind of garnishment is it? Creditor or something from a state agency?
  • I am in IL. It is a creditor garn.
  • d26k
    d26k ✭✭✭
    edited October 2010
    "Non-exempt gross wages are wages remaining after deductions for pension or retirement plan."

    This definition does not meet the smell test. On its face, this means the CS order would not be considered, FWH not considered, etc.

    Some research need to be done. Google is your friend...

    The calculation also applies to creditor garnishments according to "Complete Guide to Federal and State Garnishment, 2009 Edition By Amorette Nelson Bryant"
  • I'm in Illinois also and garnishment orders usually state "Gross Wages minus mandatory contributions to pension or retirement plans."
  • Rather FICA is left unchanged, and depending on the W-4, FIT/SIT are reduced but the aggregate reduction is much less then $100. Likely $20-$30 tops. Let's say $25 in DW reduced for each $100 in 401(k) deductions increased. Not nothing, but since a CG is 25% of DW (tops), we are only reducing a CG order by say $6.25 per $100 in increased 401(k).
    If 401(k) deduction goes up, FIT goes down, disposable wages goes up, 25% of a bigger number is a bigger number than 25% of a smaller number - Ignoring what has been discussed since on just what the order was - wouldn't increasing the 401(k) deduction increase the garnishment amount?