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Deducting Money Employees Owe to DWP

Employers can use a Direct Earnings Attachment (DEA) to deduct money an employee owes to the Department for Work and Pensions.

This section explains the process of making benefit debt deductions from employee pay, how to calculate a DEA, and what you can count as earnings.

What is Direct Earnings Attachment (DEA)?

The Welfare Reform Act 2012 allows DWP Debt Management to implement a Direct Earnings Attachment (sometimes called an arrestment).

Hence, the roles of employers can include deducting benefit overpayments from any employees that owe money to the Department for Work and Pensions.

Direct Earnings Attachments are not commonplace. But, the DWP might write to you if they want you to operate the DEA scheme (e.g. make benefit debt deductions from an employee’s pay).

Note: As an employer, you may also need to make deductions for Housing Benefit overpayments (e.g. if your employee owes their local authority). If so, you should contact your local authority about these types of debt deductions (not the DWP).

How Does a Direct Earnings Attachment Work?

If the Department for Work and Pensions write to you asking you to make Direct Earnings Attachment deductions for an employee, you will need to:

  1. Inform your employee that you will be deducting money from their pay (e.g. wages or salary).
  2. Calculate the amount you need to deduct from your employee’s pay (see below).
  3. Check whether your employee needs to pay other debt orders (and whether they take priority over DEA).
  4. Deduct the money from the pay of your employee.
  5. Use your payroll tools to make the payment to the DWP (not later than the 19th day of the month following the deduction).
  6. Continue making benefit debt deductions from your employee’s pay and continue making the payments to the DWP. You must not stop until the employee pays off the debt or DWP send you notification to do so.

Note: Read the DEA employers’ guide for further details about your legal responsibilities and how to operate a Direct Earnings Attachment.

DEA Record Keeping Requirements

As an employer, you must keep accurate records of benefit debt deductions you take from your employee’s pay. Furthermore, you would need to notify the Department for Work and Pensions (DWP) if the employee leaves your company.

You can read more about running payroll or contact the employer helpline if you need help with DWP payments or you have questions about running a DEA scheme.

DEA Employer Helpline
Telephone: 0800 916 0614
Monday to Friday: 8am to 6:30pm
Saturday: 9am to 4pm
Information on call rates

Note: Failing to make Direct Earnings Attachment deductions (when asked to do so) can result in a £1,000 fine.

How to Calculate Direct Earnings Attachment

Generally, the three steps for working out the benefit debt deductions from your employee’s pay, will be:

  1. Determining your employee’s earnings after tax, class 1 National Insurance, and their superannuation contributions (e.g. workplace pension contributions).
  2. Deducting the correct percentage from their earnings (as shown in the table below).
  3. Checking whether the employee has other debt orders attached to their earnings. If so, the orders may take priority over Direct Earnings Attachment (DEA).

Note: You would need to adjust DEA if the total of all deductions is greater than 40% of your employee’s net earnings.

Direct Earnings Attachment Rates 2022

You can use the table to calculate weekly pay and then deduct the appropriate percentage for payments made every two (2) or four (4) weeks.

Standard DEA Rates

Employee’s Pay (weekly) Employee’s Pay (monthly) Deductions from Earnings
Up to £100 Up to £430 Nothing to deduct
£100.01 to £160 £430.01 to £690 3%
£160.01 to £220 £690.01 to £950 5%
£220.01 to £270 £950.01 to £1,160 7%
£270.01 to £375 £1,160.01 to £1,615 11%
£375.01 to £520 £1,615.01 to £2,240 15%
Over £520 Over £2,240 20%

Higher DEA Rates

In some cases, the DWP might ask you to set up deductions and deduct DEA at a higher rate from your employee’s pay. If so, they will inform you of the relevant rate to use.

Employee’s Pay (weekly) Employee’s Pay (monthly) Deductions from Earnings
Up to £100 Up to £430 5%
£100.01 to £160 £430.01 to £690 6%
£160.01 to £220 £690.01 to £950 10%
£220.01 to £270 £950.01 to £1,160 14%
£270.01 to £375 £1,160.01 to £1,615 22%
£375.01 to £520 £1,615.01 to £2,240 30%
Over £520 Over £2,240 40%

What Counts as Earnings for DEA?

When you calculate Direct Earnings Attachment (DEA) payments, all the following will count as earnings:

  • Wages (and salary)
  • Bonuses
  • Commission
  • Fees
  • Overtime pay
  • Occupational pensions (if paid with wages or salary)
  • Compensation payments
  • Statutory Sick Pay
  • Pay in lieu of notice
  • Most other payments on top of wages

But, none of the following will count as earnings when calculating Direct Earnings Attachment (DEA) payments:

  • Any money that the employee gets from the government (e.g. benefits, pensions, or credits – including Northern Ireland or anywhere outside of the United Kingdom)
  • A guaranteed minimum pension under the Pensions Scheme Act 1993 (b)
  • Expenses
  • Statutory Maternity Pay (SMP)
  • Statutory Adoption Pay
  • Ordinary or Additional Paternity Pay
  • Statutory Shared Parental Pay (ShPP)
  • Statutory Redundancy Payments
  • Pay or allowances as a member of Her Majesty’s forces (excludes allowances for special members of the reserve force)

Note: Another section has further information on how to make debt deductions from an employee’s pay.

DEA for Employers: Making Benefit Debt Deductions from Employee Pay