{"id":16539,"date":"2023-08-05T06:39:36","date_gmt":"2023-08-05T06:39:36","guid":{"rendered":"https:\/\/www.theukrules.co.uk\/?page_id=16539"},"modified":"2023-09-19T04:42:36","modified_gmt":"2023-09-19T04:42:36","slug":"direct-earnings-attachment","status":"publish","type":"page","link":"https:\/\/www.theukrules.co.uk\/rules\/employment\/employing\/payroll\/direct-earnings-attachment\/","title":{"rendered":"How to Make Direct Earnings Attachment Deductions (Employer Guide)"},"content":{"rendered":"

What is Direct Earnings Attachment (DEA)?<\/h2>\n

<\/p>\n

The Welfare Reform Act 2012 allows DWP Debt Management to implement a Direct Earnings Attachment (sometimes called an arrestment).<\/p>\n

Hence, the roles of employers<\/a> can include deducting benefit overpayments from any employees that owe money to the Department for Work and Pensions.<\/p>\n

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).<\/p>\n

Note<\/strong>: As an employer, you may also need to make deductions for Housing Benefit overpayments<\/a> (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).<\/p>\n

<\/p>\n

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<\/p>\n

How Does a Direct Earnings Attachment Work?<\/h2>\n

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:<\/p>\n

    \n
  1. Inform your employee that you will be deducting money from their pay (e.g. wages or salary).<\/li>\n
  2. Calculate the amount you need to deduct from your employee’s pay (see below).<\/li>\n
  3. Check whether your employee needs to pay other debt orders (and whether they take priority over DEA).<\/li>\n
  4. Deduct the money from the pay of your employee.<\/li>\n
  5. Use your payroll tools<\/a> to make the payment to the DWP (not later than the 19th day of the month following the deduction).<\/li>\n
  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.<\/li>\n<\/ol>\n

    Note<\/strong>: Read the DEA employers’ guide<\/a> for further details about your legal responsibilities and how to operate a Direct Earnings Attachment.<\/p>\n

    <\/p>\n

    \n

    <\/p>\n

    DEA Record Keeping Requirements<\/h2>\n

    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.<\/p>\n

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

    DEA Employer Helpline<\/strong>
    \nTelephone:     0800 916 0614<\/a>
    \nMonday to Friday: 8am to 6:30pm
    \nSaturday: 9am to 4pm
    \n    Information on call rates<\/a><\/p>\n

    Note<\/strong>: Failing to make Direct Earnings Attachment deductions (when asked to do so) can result in a \u00a31,000 fine.<\/p>\n

    <\/p>\n

    \n

    <\/p>\n

    How to Calculate Direct Earnings Attachment<\/h2>\n

    Generally, the three steps for working out the benefit debt deductions from your employee’s pay, will be:<\/p>\n

      \n
    1. Determining your employee’s earnings after tax, class 1 National Insurance, and their superannuation contributions (e.g. workplace pension contributions).<\/li>\n
    2. Deducting the correct percentage from their earnings (as shown in the table below).<\/li>\n
    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).<\/li>\n<\/ol>\n

      Note<\/strong>: You would need to adjust DEA if the total of all deductions is greater than 40% of your employee’s net earnings.<\/p>\n

      <\/p>\n

      \n

      <\/p>\n

      Direct Earnings Attachment Rates 2022<\/h2>\n

      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.<\/p>\n

      Standard DEA Rates<\/h5>\n

      <\/p>\n\n\n\n\n\n\n\n\n\n\n
      Employee’s Pay (weekly)<\/th>\nEmployee’s Pay (monthly)<\/th>\nDeductions from Earnings<\/th>\n<\/tr>\n
      Up to \u00a3100<\/td>\nUp to \u00a3430<\/td>\nNothing to deduct<\/td>\n<\/tr>\n
      \u00a3100.01 to \u00a3160<\/td>\n\u00a3430.01 to \u00a3690<\/td>\n3%<\/td>\n<\/tr>\n
      \u00a3160.01 to \u00a3220<\/td>\n\u00a3690.01 to \u00a3950<\/td>\n5%<\/td>\n<\/tr>\n
      \u00a3220.01 to \u00a3270<\/td>\n\u00a3950.01 to \u00a31,160<\/td>\n7%<\/td>\n<\/tr>\n
      \u00a3270.01 to \u00a3375<\/td>\n\u00a31,160.01 to \u00a31,615<\/td>\n11%<\/td>\n<\/tr>\n
      \u00a3375.01 to \u00a3520<\/td>\n\u00a31,615.01 to \u00a32,240<\/td>\n15%<\/td>\n<\/tr>\n
      Over \u00a3520<\/td>\nOver \u00a32,240<\/td>\n20%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
      \n<\/p>\n
      Higher DEA Rates<\/h5>\n

      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.<\/p>\n\n\n\n\n\n\n\n\n\n\n
      Employee’s Pay (weekly)<\/th>\nEmployee’s Pay (monthly)<\/th>\nDeductions from Earnings<\/th>\n<\/tr>\n
      Up to \u00a3100<\/td>\nUp to \u00a3430<\/td>\n5%<\/td>\n<\/tr>\n
      \u00a3100.01 to \u00a3160<\/td>\n\u00a3430.01 to \u00a3690<\/td>\n6%<\/td>\n<\/tr>\n
      \u00a3160.01 to \u00a3220<\/td>\n\u00a3690.01 to \u00a3950<\/td>\n10%<\/td>\n<\/tr>\n
      \u00a3220.01 to \u00a3270<\/td>\n\u00a3950.01 to \u00a31,160<\/td>\n14%<\/td>\n<\/tr>\n
      \u00a3270.01 to \u00a3375<\/td>\n\u00a31,160.01 to \u00a31,615<\/td>\n22%<\/td>\n<\/tr>\n
      \u00a3375.01 to \u00a3520<\/td>\n\u00a31,615.01 to \u00a32,240<\/td>\n30%<\/td>\n<\/tr>\n
      Over \u00a3520<\/td>\nOver \u00a32,240<\/td>\n40%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
      \n<\/p>\n
      \n

      <\/p>\n

      What Counts as Earnings for DEA?<\/h2>\n

      When you calculate Direct Earnings Attachment (DEA) payments, all the following will count as earnings:<\/p>\n