There are several legal mechanisms that creditors or legal bodies can take against you in order to recover payments through your wage.
In the UK, these include Attachment of Earnings Orders, Deductions of Earnings Orders and Direct Earnings Attachments.
As each is unique and can affect your earnings in different ways, it’s important to understand the differences between them.
What is a Direct Earnings Attachment?
A Direct Earnings Attachment (DEA) is a form of legal debt recovery in which a deduction is attached directly to your earnings through your employer and paid to the Department of Work and Pensions (DWP)
A DEA is applied to recover debts such as benefit overpayments and housing benefits. The debt recovery solution was brought into law in March 2012, allowing local council and government bodies to retrieve benefits owed due to overpayments.
What benefit overpayments can be collected on a Direct Earnings Attachment?
A DEA is used to collect overpayments on benefits and government help schemes, these include:
- Universal Credit
- Working Tax Credit
- Child Benefits
- Employment and Support Allowance
What earnings can be taken as part of a Direct Earnings Attachment?
- Wages and salary
- Commissions
- Occupational pensions
- Statutory sick pay
- Fees and commission
The list of payments that aren’t include are as follows:
- Statutory Maternity Pay
- Guaranteed minimum pension
- Statutory Adoption Pay
- Expenses
- Any money you get from the government
- Allowance as a member of HM Forces
How do I pay a Direct Earnings Attachment?
A Direct Earnings Attachment is a repayment scheme directly applied to your paycheque through your employer. Once applied, the DEA will take monthly deductions from your pay monthly earnings until the amount is collected.
Though a DEA can be applied without your express permission, the maximum amount that can be taken is 20% at a standard rate and 40% at a higher rate. The DEA cannot exceed 40% and the employee must be left with at least 60% of their net income. This also takes into account income tax, National Insurance and pension contributions.
Does my employer need to be informed of a Direct Earnings Attachment?
A DEA request is a repayment plan sent directly to your employer. This means your employer will be informed if a DEA is applied to your wages and will need to approve the arrangement directly once a request is sent.
This means that your employer will be made aware of your outstanding payments once a DEA request is sent and will need to take responsibility for your repayment scheme once it is approved.
You may be able to avoid entering a DEA by getting in contact with the authority or council you owe your overpayments to and agreeing to manually pay the outstanding amount.
Do you have to go to court for an Direct Earnings Attachment?
Your employer receiving a Direct Earnings Attachment request does not require a court order to be applied, this means that any action in regards to a DEA does not require you to appear in court, nor does it denote legal action has been taken against.
This does not mean that local councils and benefit providers cannot take legal action against you in the future however, and if creditors
What percentage of your earning can a Direct Earning Attachment take?
The amount can be taken through a Direct Earning Attachment Of Earning request can very depending on the payment rate being requested.
On a standard rate DEA, the maximum amount that can be taken from your pau check is £20 of take home pay
A higher rate DEA is capped at 40% of your take home salary once any tax, National Insurance or pension payments have been deduced. This higher rate DEA is typically reserved for special cases or if you have been found guilty of a recent offence.
Can multiple arrestment’s be applied to my earnings?
There are multiple forms of debt arrestment in the UK that can be applied to your payments in the recovery of debts. However, the same rules of leaving at least 60% of your net wage must still apply.
A DEA is considered a non-priority repayment, this means that if you are currently paying the maximum amount of 40% on a priority arrestment, such as an Attachment of Earnings Order this will ultimately overrule the DEA and you cannot be made to pay above this.
However, if your repayment amounts are within the limit and you are able to repay multiple arrestment’s within the 40% limit then you may be required to do so.
Debt solutions
If you find yourself in a difficult situation and unsure of how to manage these repayments, it’s important to know that MoneyPlus offers debt solutions, including Individual Voluntary Arrangements (IVAs), Debt Management Plans (DMPs), and Debt Relief Orders (DROs) which can help you navigate through these challenges.
