New Oregon Law Will Allow State to Garnish Lottery Payouts

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One of the reasons many people choose the lump sum lottery payout when they win it big it to take control of their money and get the government out of it. The government already withholds up to 25% of jackpot winnings in taxes and now a new state law that’s set to take effect in Oregon on Jan. 1 will open the door for more garnishment of some delinquent citizens who win lottery payments.

According to, the new law gives the Department of Human Services and the Oregon Health Authority the authority to garnish lottery payouts of $600 or more to repay owed overpayments of welfare, Medicaid, and food stamps. Whenever a person claims a lottery payout of $600 or more, it doesn’t matter if it’s a lump sum versus annuity, lottery officials must first check with those two agencies before giving them any money.

If the lottery winner owes any overpayments, the lottery must hold the lottery payout for 30 days to allow human services or health officials to garnish the winnings to recover the money owed. In the event the payout is greater than the overpayment due, the winner will be paid the difference.

Currently, the state is allowed to do the same thing for child support and individual might owe. Under the new law, any lottery payments will go first towards child support debt followed by overpayments.

It’s unclear whether this law will affect national lotteries, like the Mega Millions. The Mega Millions is one example of an annuity, which is paid out as one immediate payment followed by 29 annual payments. Each payment grows by 5%.

Aside from worrying about lottery payments being garnished for past debts, winners should also establish a plan/budget. Nearly 70% of all lottery winners lose or spend all of their money, which is one good reason about half (48%) of lotto winners still work after winning the lottery.