The information below is intended to help you understand the main points about DEA and is not a full description or statement of the law.
The Department for Works and Pensions (DWP) and Local Authorities are responsible for recovery of money owed to the State as a result of debt arising under the Social Security Administration Act 1992.
Where the Secretary of State, or authority administering housing benefit, has been unable to recover money owed to the DWP by customers not currently in receipt of benefit, that money may now be recovered by a deduction from the customer’s earnings.
The Welfare Reform Act 2012, which became law in March 2012, allows DWP Debt Management and Local Authorities to ask you, as an employer, to make deductions directly from a customer’s earnings. We do this by asking you to operate a Direct Earnings Attachment (DEA). We do not have to go through the civil courts to do this, unlike the Attachment of Earnings Order (AOE) process, for example.
A DEA has its own regulations which follow some of the workings of a Deduction from Earnings Order (DEO) and some workings of an Attachment of Earnings Order (AEO). A DEA does not replace any of these other orders and in some circumstances employers may receive requests to implement deductions for a DEO and a DEA for the same employee.
You may be familiar with a DEO if you have ever been ordered to make deductions from an employee’s earnings or pension for the Child Maintenance Group (CMG) (previously known as the Child Maintenance and Enforcement Group (CMEC, or the Child Support Agency (CSA)), as a way of collecting child maintenance from a non-resident parent.
As an employer, you have a legal obligation to:
You must also notify us by writing to the address shown on the DEA request letter within 10 days if:
To your employee, you have a duty to notify them in writing of the amount of the deduction taken, including any amount taken for administrative costs (see section on Administrative Costs). If this information is shown on the payslip, it will suffice. You must do this (and record it) no later than the payday after the one on which the deduction for the DEA was taken.
The table below lists what counts and what does not count as earnings
| What counts as earnings for DEAs | What does not count as earnings for DEAs |
|---|---|
| Wages | Statutory Maternity Pay |
| Salary | Statutory Adoption Pay |
| Fees | Ordinary Statutory Paternity Pay |
| Bonuses | Additional Statutory Paternity Pay |
| Commission | Any pension, benefit, allowance or credit paid by DWP, a Local Authority or HMRC |
| Overtime pay | A guaranteed minimum pension under the Social Security Act 1975 |
| Most other payments on top of wages | Amounts paid by a public department of the Government of Northern Ireland or anywhere outside the United Kingdom |
| Occupational Pensions (if paid with wages or salary) | Sums paid to reimburse expenses wholly and necessarily incurred in the course of the employment |
| Compensation payments | Pay or allowances as a member of Her Majesty’s Forces, other than pay or allowances payable to them by you as a special member of a reserve force |
| Statutory Sick Pay | Redundancy payments and pay in lieu of notice |
If the only earnings your employee receives are those in the right hand column, you cannot calculate a DEA deduction. Similarly, if any of these are paid as part of the earnings, they are not to be included as part of the employee’s net earnings.
You must continue to calculate a DEA deduction, if applicable, each pay period until the balance is paid in full, we tell you to stop or your employee leaves your employment.
Net Earnings
You must take the amount for the DEA directly from your employee’s net earnings. (Net earnings are the amounts the employee earns after taking off income tax, National Insurance and contributions to a pension, including Additional Voluntary Contributions, Free Standing Additional Voluntary Contributions and Stakeholder Pension Contributions).
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:
We will include the National Insurance number of our customer on all our letters we send to you.
We will ask you to make deductions in line with your payroll frequency. However, payments can be remitted monthly to us.
It is your responsibility to ensure you take the right amount from your employee’s earnings each week or month and pay it to us.
When you calculate the DEA deduction amount, you must:
If there is already a DEO in place from CMG, or other priority orders are in place, please refer to the section 'Examples of DEA in practice' below.
You will need to:
If an employee is paid a wage which included holiday pay paid in advance, the net wage is averaged, and the percentage rate applied to the average figure, as follows:
Employee received one week’s wage and two weeks holiday pay.
Total net payment for three weeks = £850
£850/3 = £283.33
£283.33 x 11% = £31.17
Total deduction from net wage of £850 - £93.51 (£31.17 x 3)
The exact amount of the net wage is used against the Table of amounts to be deducted by employer (PDF)[37kb]. 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 below, as follows:
Net wage £235.63 per week
£235.63 x 7% = £16.4941
Weekly deduction = £16.49
Net wage £1,547.99 per month
£1,547.99 x 11% = £170.278
Monthly deduction = £170.28
For each 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.
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:
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% 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:
It is important to note that 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% (Example 3 of 'examples of DEA in practice below' refers) this is NOT a shortfall as described. A shortfall only occurs when an incorrect amount has been deducted in error, or when one or more deductions have been missed.
Example 1
A weekly paid earner with no prior attachment orders. A person with net earnings £385 per week will have a deduction of £57.75 per week (in accordance with the deduction rates table at 15%)
Example 2
A weekly paid earner that already has an existing attachment order for child maintenance deductions. 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%)
Example 3
A monthly paid earner with existing priority attachment orders totalling £486. A person with net earnings of £1,620per month should have a DEA deduction of £243 (in accordance with the deduction table at 15%).
However, this deduction in addition to the existing deductions of £486, will breach the protected earnings limit of 60%. The maximum deduction we can make in this instance would be £162.
Calculation:
Earnings x 40% = £648 (max amount for total deductions)
Existing priority attachment order in place = £486
DEA deduction is £243
£648 - £486 = £162 (maximum amount available for the DEA deduction)
Therefore, although the deduction rates table states that a deduction of £243 should be taken, the protected earnings limit means that the amount will be restricted to £162.
If the weekly or monthly earnings are below the threshold (see table of amounts to be deducted by employer (PDF)[37kb]) 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.
On receipt of a notice to operate a DEA, you must:
You can make a payment to us by the following methods:
Our bank details are as follows:
Account: HSBC Basingstoke and Deane General Account
Sort Code: 40-09-18
Account Number: 51521691
When making payment, by any method, quote the employee’s invoice number
To pay by cheque, make it payable to ‘ Basingstoke and Deane Borough Council ’ and write the employee’s Invoice Number on the back of the cheque. Please send cheques to:
Basingstoke and Deane Borough Council
Civic Offices
London Road
Basingstoke
RG21 4AH
Please provide a payment schedule if you are making payment in respect of more than one employee at the same time.
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 (England and Wales), Earnings Arrestment (Scotland) or a Deduction from Earnings Order (for Child Maintenance), for example. 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:
England & Wales
Scotland
England, Wales & Scotland
Once these priority orders have been taken into account in your calculation a DEA will then take priority in relation to other orders or notices in date order (in Scotland this will be the date they were received). The amount you can deduct will be subject to the available net earnings above the protected earnings limit of 60% of net earnings.
If your employee thinks that the amount of money they owe is wrong, you should advise them to contact us on 01256 844844 (select option 2).
If they think that the amount you have calculated is too much, you should first check that the amount being deducted is the amount according to the table of amounts to be deducted by employer (PDF)[37kb], on the basis of their earnings and other orders in place. If the amount is correct, you should explain that you have made the deduction as instructed to do so. If they feel that this is too much for them to manage, you should advise them to contact us.
Once you have started operating a DEA, you must continue to make payments to us until we tell you to stop, or until the invoice balance has been paid in full. We shall contact you if we require the deductions 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.
Please contact us if you require any further information or help in operating a DEA.
Benefits Team
If you have an enquiry about benefits, send a message to the Benefits Team
Receive information on council services, news and events by email.
Subscribe© 2024 Basingstoke and Deane Borough Council