FastTrack360 Version 12 Online Help
UK Payroll - Attachment of Earnings Orders
- Fiona Sims
Overview of Attachment of Earnings Orders (AEOs)
There are various types of order than an employer may be asked to operate against earnings, they are commonly referred to by the generic term ‘court’, or ‘statutory orders’. They are enacted under the following acts:
The Attachment of Earnings Act 1971, Debtors (Scotland) Act 1987 and The Magistrates Courts (Northern Ireland) Order 1981
Local Government Finance Act 1988 by Local Authorities for the purpose of collecting Council Tax (CTAEOs)
The Child Support Act 1991 and the Child Maintenance and other Payments Act 2008
The Courts Act 2003 – Schedule 5 Fines Orders
The Social Security Regulations 2013
The order that is given to the employer usually states an amount to be deducted from net attachable earnings, although CTAEOs, Schedule 5 Orders, Scottish Arrestment, DEOs and Direct Earnings Attachments require a calculated value using a set of tables or a set formula.
AEOs are classified into 2 categories: ‘priority’ and ‘non priority’. The type and the date the order is made determines if it is priority or non priority. Priority orders must be satisfied before non priority orders are deducted.
Priority Orders
These are for fines or maintenance and all child support and CTAEOs.
Non Priority Orders
These are for civil debts such as unpaid finance loans.
Protected Earnings
This is the amount at which a person ‘net’ earnings may not be reduced. Priority orders usually have that if a full deduction cannot be taken, the balance is carried forward and added to the next period.
Protected earnings can either be a specified amount defined on the order or it can be a percentage amount.
Configuration
Each AEO tends to have its own rules on how it should be calculated and so FT360 allows for users to define how they believe the AEO should operate. The following pages describes:
How to configure the net attachable pay for the calculation of AEOs
How to configure the Deduction Header for AEOsThe configuration settings that can be used in the set up of AEOs
Here are links on:
How the AEOs are applied to a payee
How the AEOs operate in the pay batches
Summary of AEOs
The following table provides a summary of the AEOs that can be configured within the application
Attachment Name | Priority | Based on Value or Rate Table | Protected Earnings | Student Loan Deduction | Unpaid Deductions Carried Forward |
|---|---|---|---|---|---|
Council Tax (CTAEO) | Priority | Rate Table | No | No. Student Loan should not be taken. | No. |
DEO Value DEO Percentage | Priority | Value | Yes. Could be a value or percentage based. | Yes. Partial deduction applied if protected earnings exceeded. | Yes. |
Earnings Arrestment | Priority | Rate Table | No | No. Student Loan should not be taken. | No. |
Fines | Priority | Rate Table. Same as CTAEO. | No | No. Student loan should not be taken. | No. |
DEA | Non Priority | Rate Table | Yes. Usually 60% | Yes. Student loan should be taken first and considered as part of protected earnings before DEA Deduction. | No. Deduct what is possible up to protected earnings. |
DEA Higher | Non Priority | Rate Table | Yes. Usually 60% | Yes. Student loan should be taken first and considered as part of protected earnings before DEA Deduction. | No. Deduct what is possible up to protected earnings. |
DEA Value | Non Priority | Value | Yes. Usually 60% | Yes. Student loan should be taken first and considered as part of protected earnings before DEA Deduction. | No. Deduct what is possible up to protected earnings. |
Priority Order | Priority | Value | Yes. Usually a defined value. | Yes. Partial deduction applied if protected earnings exceeded. | Yes. |
Non Priority Order | Non Priority | Value | Yes. Usually a defined value. | Yes. Student loan should be taken first and considered as part of protected earnings before DEA Deduction. | No. |
Current Maintenance Order | Priority | Daily Rate | Yes. A daily rate. | Yes. Partial deduction applied if protected earnings exceeded. | No. |
AEO Rate Tables
AEOs that are based on Rate Tables, the values can be viewed here:
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