In New Jersey, unemployment compensation benefits can be garnished under certain circumstances. Wage garnishment is typically a method used to collect a debt when other attempts have failed. For example, if you are behind on child support, the court can order a wage garnishment. A court-ordered wage garnishment can either be private or federal.
If a parent is ordered to pay child support and currently receiving unemployment benefits, the Child Support Program through the New Jersey Department of Labor can withhold child support from the unemployment payment. State law allows up to 50 percent of the disposable income to be garnished. If the unemployment is not enough to cover the child support obligation, the noncustodial parent will still be responsible for the difference. Child support is not automatically modified in New Jersey. You will need to file a petition to modify the child support order. However, the court does not typically grant modifications for temporary changes in circumstances.
Since unemployment benefits are a substitute for employment wages, state wage limits do not apply to federal or state tax debt. The garnishment amounts and exemptions are based on your wages, family size, tax-filing status and age. Your expenses and other obligations, such as child support, may be taken into consideration while receiving unemployment.
Creditors and other individuals with a judgment claim against you are only authorized to garnish your unemployment wages if they obtain "writ of execution." According to Chapter 2A Section 17-56 of the New Jersey Permanent Statutes, if your income is less than 250 percent of the federal poverty level based on household size, only 10 percent of your wages can be garnished. if your income exceeds 250 percent, a 25 percent wage garnishment may apply. In 2011, the maximum unemployment weekly benefit payment is $598.
If you choose to file bankruptcy, your assets can be seized. New Jersey has some protection under state and federal laws. Certain assets and income, including unemployment benefits, are protected from garnishment. Social Security and public assistance benefits also are excluded.