Direct Earnings Attachment FAQ
Frequently asked questions
How do I operate a DEA?
We will send you a letter (notice) which tells you to apply a DEA for your employee. This notice will include a payment schedule which will inform you of:
- When to send us payments.
- Where to send payments.
- How you can pay us.
We will ask you to make payments in line with your payroll, so if your employee is paid weekly or monthly, you should pay us at the same time. However, if your employee is paid weekly you must still calculate and deduct the payment weekly, but you can pay us monthly if you prefer.
It is your responsibility to ensure you take the right amount from your employees earnings each week or month and pay it to us.
When you calculate the DEA deduction amount, you must:
- Ensure that your employee has enough net earnings in the pay period for you to calculate a deduction.
- Check that the correct percentage rate has been applied against those net earnings.
- Check that the total of all deductions does not leave the employee with less than 60 per cent of their total net earnings during the calculating period to which the deduction relates.
If there is already a Direct Earnings Order in place, or other priority orders are in place, please refer to the examples on the following pages.
How do I calculate the amount to deduct?
- Work out the employee’s net earnings as defined previously.
- Use the following tables (A and B) to find the deduction percentage rate for the employee’s net earnings. Net earnings are gross pay, less tax, national insurance and pension contributions.
- Use the percentage figure against the net earnings figure to calculate the amount to be deducted.
Table A where earnings are paid weekly
| Net earnings | Deduction (percentage of net earnings) |
|---|---|
| Less than and exactly £100 | Nil |
| Exceeding £100 but not exceeding £160 | 3 per cent |
| Exceeding £160 but not exceeding £220 | 5 per cent |
| Exceeding £220 but not exceeding £270 | 7 per cent |
| Exceeding £270 but not exceeding £375 | 11 per cent |
| Exceeding £375 but not exceeding £520 | 15 per cent |
| Exceeding £520 | 20 per cent |
Table B where earnings are paid monthly
| Net earnings | Deduction (percentage of net earnings) |
|---|---|
| Less than and exactly £430 | Nil |
| Exceeding £430 but not exceeding £690 | 3 per cent |
| Exceeding £690 but not exceeding £950 | 5 per cent |
| Exceeding £950 but not exceeding £1,160 | 7 per cent |
| Exceeding £1,160 but not exceeding £1,615 | 11 per cent |
| Exceeding £1,615 but not exceeding £2,240 | 15 per cent |
| Exceeding £2,240 | 20 per cent |
If an employee is paid
- 2 weekly - the total net wage is divided by 2 and table A is used
- 4 weekly - the total net wage is divided by 4 and table A is used
Holiday Pay
If an employee is paid a wage which includes holiday pay paid in advance, the net wage is averaged, and the percentage rate applied to the average figure, as follows:
- Employee receives one weeks wage and two weeks holiday pay
- Total net payment for 3 weeks is £850.00
- £850 divided by 3 = £283.33
- £283.33 multiplied by 11 per cent = £31.17
Total deduction from net wage of £850 = £93.51 (£31.17 times 3)
Rounding
The exact amount of the net wage is used against table A and B.
If the percentage amount calculated results in a fraction of a penny, it is rounded to the nearest whole penny, with a result of exactly half a penny being rounded down to the nearest whole penny.
Administrative costs
For each pay period when you calculate the DEA deduction, you may also take up to £1 from your employee’s earnings towards administrative costs. You can take this even if it reduces the employee’s income below the protected earnings proportion.
Failure to take deductions or incorrect deductions made
If you fail to take a deduction from the employee’s net earnings when it is appropriate to make a deduction, or take an incorrect amount you should correct this on the next payday or paydays.
Where the incorrect amount is because the deduction was less than the amount specified under the regulations then you should first:
- Deduct the amount required for the current pay period;
- Then include the difference between the incorrect and correct amount.
Please note that the total to be deducted, including adjustments for an incorrect deduction, along with other deductions in place, must not leave the employee with less than the protected earnings limit of 60 per cent for each pay period.
Where the incorrect amount is because the deduction was more than the amount specified under the regulations then you should first.
- deduct the amount required for the current pay period;
- then reduce the deductions amount by the excess previously taken.
Important note: if a deduction is reduced in any week or month simply because the DEA along with other orders in place will breach the protected earnings limit of 60 per cent this is NOT a shortfall as described above.
A shortfall only occurs when an incorrect amount has been deducted in error, or when one or more deductions have been missed.
Examples of Direct Earnings Attachment in practice
Example 1: A weekly paid earner with no prior attachment orders
A person with net earnings of £385 per week will have a deduction of £57.75 per week ( in accordance with the deduction rates table at 15 per cent)
Example 2: A weekly paid earner with an existing attachment order for child maintenance
A person with net earnings of £250 per week with an existing attachment order of £60 per week for child maintenance will have a deduction of £17.50 (in accordance with the deduction table at 7 percent)
Example 3: A monthly paid earner with existing priority attachment orders totalling £486
A person with net earnings of £1620 per month should have a DEA deduction of £243 (in accordance with the deduction table at 15 per cent). However, this deduction in addition to the existing deductions of £486, will breach the protected earnings limit of 60 per cent. The maximum deduction we can make in this instance would be £162.
Calculation
- Earnings multiplied by 40 per cent = £648 (maximum amount of total deductions) Existing priority attachment order in place = £486
- DEA deduction is £243
- £648 les £486 = £162 (maximum amount available for the DEA deduction)
Therefore, although the deduction rates table stats that a deduction of £243 should be taken, the protected earnings limit means that the amount will be restricted to £162.
What if my employee does not earn enough for a deduction to be made?
If the weekly or monthly earnings are below the threshold (tables A and B refer) you cannot calculate a DEA deduction.
You must continue to calculate a DEA deduction, if applicable, each pay period until either we tell you to stop or your employee leaves your employment.
What if the employee has other court orders against them ?
Courts can make orders that mean you must take money directly from your employee’s earnings in a similar way to how we ask you to make deductions for a DEA. Your employee may have an attachment of earnings order, or a deduction from earnings order (for child maintenance). The DEA can be imposed without a court order, but if your employee has any other deduction orders against them there are rules that tell you which money you should take first.
If your employee has one or more of the following in place, these will take priority over a DEA.
- Deduction from Earnings Order (DEO) – child maintenance
- Attachment of Earnings Order (AOE) for maintenance or Fines
- Council Tax Attachment of Earnings Order (CTAOE)
- A student loan repayment
Once these priorities have been taken into account in your calculation a DEA will then take priority in relation to other orders or notices in date order. The amount you can deduct will be subject to the available net earnings above the protected earnings limit of 60 per cent of net earnings.
What happens once I am operating a Direct Earnings Attachment ?
Once you have started operating a DEA, you must continue to make payments to us until we tell you to stop. We shall contact you when deductions are to cease.
If there is a change in circumstances which means that you can no longer operate the DEA, you must notify us in writing within 10 days.
Guidance and assistance
If you need more information or help with Direct Earnings Attachments please ring the Housing Benefit Recovery Section on 01295 227002.