How to Configure an Attachment of Earnings Order

1.

The Deduction Type should be selected for the relevant AEO as there are other fields in the configuration that become active based on the above AEO types listed. Please note that there are separate deduction types depending on whether the same AEO is percentage or value based such as a Deduction from Earnings.

2.

Deduct From should always be Net. If this is set to Gross this will mean that the deduction will reduce the taxable pay on which tax is calculated.

3.

Apply Order should be set appropriately as this will be the default on the order in which an AEO priority should be deducted. 1 means it will be calculated/deducted first, 2 means the deduction will be calculated/deducted following deductions with the order of 1.

You need to consider your other deductions and whether the AEO should take into account other deductions first. This is also relevant for the determination of the Net Deduction Component to calculate the net attachable pay. If a deduction is reliant on other deductions being determined, the deduction with the net deduction component would need to have a lower Apply Order than the deductions in the net deduction component. Therefore, the apply order should not be '1' for all deductions. For example, an AEO needs to consider pension contributions. The pension contribution should have a higher apply order (such as 2 or 3) to have the value determined before the calculation of the AEO (the AEO would have an order of 5 as this is lower than 2).

4.

Net Deduction Component is a mandatory field for the AEO deduction types as described above. This defines the net attachable earnings on which the AEO percentage calculation will be based.

5.

In Deduction Settings there are additional fields to configure depending on the AEO type that you have and these are described below.

6.

In Rate Table, some AEOs are based on a rate table and these tables are maintained by FastTrack as part of the Statutory Parameter download. If the AEO is based on a rate table, select the available table from the dropdown in Rate Table. There are separate rate tables for each frequency and so if you will need to set up an AEO that has a rate table for each frequency. The AEOs that have a rate table are:

• Council Tax (CTAEO)

• Direct Earnings Attachment Percentage (DEA)

• Direct Earnings Attachment Higher Rate (DEA Higher)

• Current Earnings Arrestment (EA)

7.

In Trigger Deduction, if you wish to apply the admin fee, you need to set up a deduction header separately with a default rate value of £1 and apply that deduction to Trigger Deduction. This will mean that when a payee has an AEO deduction, the admin fee deduction will automatically trigger to be deducted as an adhoc deduction. You do not need to set up the admin fee against the payee deductions.

8.

In Protected Earnings Arrears Action, some AEOs require you to carry forward the remaining amount that could not be deducted if the protected earnings were exceeded or it could be to deduct up to the protected earnings and not carry forward the amount it could not deduct. A Carry Forward setting, for example, would be for a DEO where this there is no outstanding balance as it is child support. A Deduct Up To setting would be for a Council Tax deduction as there is a balance remaining. These 2 options are configured against the Protected Earnings Arrears Action.

9.

In Deduct Student Loan, the collection of student loan/postgraduate loan also has to be considered for AEO and there are different requirements for each AEO. The Deduct Student Loan setting has the options of Deduct Full, No Deduction, and Up to Protected Earnings.

Deduct Full means that the student loan/postgraduate loan should be deducted in full irrespective of any protected earnings.

No deduction means that if the AEO is deducted, the student loan/postgraduate loan will not be deducted.

Up to Protected Earnings means FT360 will deduct what it can up to the protected earnings.

10.

In Protected Earnings Net Deduction Component, it is necessary to define what is included in the protected earnings as this can be different to the net attachable earnings. An example of this is where higher priority orders should be considered as part of the protected earnings but the higher priority orders are not included in determining the net attachable pay on which the AEO percentage is based. The system will default the Net Deduction Component setting into this field but you will need to assess if this should consider other higher priority orders and potentially apply a different Net Deduction Component.