We have a duty to collect any outstanding payments that are owed to us under the rules of the Social Security Administration Act 1992 .
Local authorities have the power to recover overpaid housing benefit by deductions from earnings without the need to apply for a court order. This is done using Direct Earnings Attachments (DEA).
Local authorities were given this power by The Social Security (Overpayments and Recovery) Regulations 2013 .
Not everyone enters into a voluntary repayment agreement. DEAs give us the opportunity to recover overpaid benefits from debtors who are employed if they:
Employers have a legal obligation to implement a DEA for the council.
The exception is if you are a:
In these cases you are not obliged to operate a DEA, although you may do so if this is agreed with your employee.
If you fail to comply with your duties, you could be fined up to £1,000.
As an employer, you have a legal obligation to:
You must tell us if:
You will receive a notice letter from us. You must tell us within 10 days of receiving the letter if any of the above applies to you or if your business ceases trading.
Email us at sundrydebtors@castlepoint.gov.uk
You must tell your employee in writing of:
You must make a record of this by the payday after the DEA deduction was taken.
When calculating the DEA deductions amount, you must:
For the purposes of a DEA, these payments are counted as earnings:
You must take the amount for the DEA directly from your employee's net earnings.
Net earnings are the earnings left after deduction of:
contributions to a work place pension including:
Protected earnings
Deductions must not leave the employee with less than the protected earnings limit of 60% for each pay period.
This includes adjustments for an incorrect deduction and any other deductions in place.
Weekly net earnings | Monthly net earnings | Deduction rate (% of net earnings) |
Less than £100 | Less than £430 | 0% |
£100 to £159.99 | £430 to £689.99 | 3% |
£160 to £219.99 | £690 to £949.99 | 5% |
£220 to £269.99 | £950 to £1,159.99 | 7% |
£270 to £374.99 | £1,160 to £1,614.99 | 11% |
£375 to £519.99 | £1,615 to £2,239.99 | 15% |
£520 or more | £2,240 or more | 20% |
The exact amount of the net wage is used against the table. If the percentage amount calculated results in a fraction of a penny, it should be rounded to the nearest whole penny. If it is exactly half a penny, it should be rounded down to the nearest whole penny.
Example A
A person with net earnings of £385 per week and no attachment orders:
Example B
A person with net earnings of £250 per week with an existing attachment order of £60 per week for child maintenance:
Example C
A person with net earnings of £1,620 per month with existing priority attachment orders of £486:
However, this would breach the protected earnings limit of 60%.
Example C calculation
The protected earnings limit means that, in this case, the DEA deduction amount will be restricted to £162.
If an employee is paid every 2 weeks, the total net wage is divided by 2 and the table is used to check the percentage rate.
If an employee is paid every 4 weeks, the total net wage is divided by 4 and the table is used to check the percentage rate.
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.
For example:
The employee received one week’s wage and 2 weeks holiday pay.
Total net payment for 3 weeks = £850:
Total deduction from the net wage for 3 weeks of £850 = £93.51 (£31.17 x 3).
For each pay period when you calculate the DEA deduction, you can charge £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.
You should make corrections on the next payday if you:
If the incorrect amount is because the deduction was less than the amount specified under the regulations then you should:
If the incorrect amount is because the deduction was more than the amount specified under the regulations, then you should:
If a deduction is reduced because the DEA (along with any other orders) will breach the 60% protected limit, this is not a shortfall.
A shortfall only occurs when an incorrect amount has been deducted in error, or where one or more deductions have been missed.
Courts can make orders that mean you must take money directly from your employee's earnings in a similar way to deductions for a DEA.
If your employee has any other deduction orders against them, there are rules that tell you which money you should take first.
These take priority over a DEA:
A student loan repayment also takes priority over a DEA.
Once these priority orders have been considered 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 depend on the available net earnings above the protected earnings limit of 60%.
If the weekly or monthly earnings are below the threshold you cannot calculate a DEA deduction.
You must tell the council why a deduction cannot be made by using a DEA payments schedule.
You must continue to calculate whether a DEA deduction can be made each pay period until either:
If your employee thinks that the amount of money they owe is wrong, tell them to email us urgently at sundrydebtors@castlepoint.gov.uk.
If they think that the amount you have calculated is too much, check that the amount being deducted is correct according to table, based on 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, ask them to contact us.
We ask you to make payments in line with your payroll.
If your employee is paid weekly you must calculate and deduct the payment every week. You can pay us every 4 weeks if you prefer.
It is your responsibility to make sure you take the right amount from your employee's earnings each week or month and pay it to us.
When you get a notice to operate a DEA, you must:
This is our preferred method of payment, because it is secure and quick.
When setting up a payment, you will need:
If the payment is for one employee, enter the employee's account/invoice no.
If the payment covers multiple employees, you will need to send multiple payments. Quote each individual invoice number to make sure payments are allocated correctly.
If you are paying by BACS, you will need to send a DEA payment schedule to us so we know who the payment refers to.
The DEA payments schedule must include the following details for each person:
The amount of the automated credit transfer must be the same as the total amount of deductions shown on the DEA payments schedule.
Direct Earnings Attachment Payments Schedule [pdf] 66KB
Email the DEA payments schedule to sundrydebtors@castlepoint.gov.uk and the payment can follow.
Include 'DEA notice' in the subject of your email.
If there is a change of circumstances which means that you can no longer operate the DEA, you must tell us within 10 days of that change happening.