How Attachment of Earnings Orders are Processed

Attachment of Earnings Orders (AEOs) are net deductions and thus calculated at the net deduction stage of the pay batch process. AEO calculations vary because of the legislative requirements and so because of this, the AEO calculations will be dependent on how it has been configured in the deduction header.

Most AEOs have a net protection value/percentage and where a payee's pay falls below the net protected value when the AEO is deducted, depending on the configuration set for the AEO, will mean that the AEO may not be deducted in full and could also affect Student/Postgraduate loan deductions. The settings that will affect the actual deduction are:

Setting	Option	Result of Setting

Setting	Option	Result of Setting
Protected Earnings Arrears Action	Carry Forward	If the full AEO deduction could not be deducted because it would mean the payee's net pay would fall below the protected earnings, the amount that could not be deducted, along with any remaining protected earnings, will be carry forward to the next pay batch or pay period and added to the next deduction calculated. This setting would normally be applied to an AEO that does not have an outstanding balance such as a DEO.
	Up to Protected Earnings	If the full AEO deduction could not be deducted because it would mean the payee's net pay would fall below the protected earnings, it would deduct the AEO value up to the protected earnings and the remainder would not be deducted. This setting would normally be applied to an AEO that has an outstanding balance.
Deduct Student Loan	Deduct Full	Student/Postgraduate loan should not be considered as part of the protected earnings and will be deducted in full. An example of this is for a DEA.
	No Deduction	Student/Postgraduate Loan will not be deducted at all. An example of this is a CTAEO. If the payee has a DEO and a CTAEO with different configuration, if one of the AEOs has the setting of No Deduction, the Student/Postgraduate loan will not be deducted. The value that could not be deducted will be added as a negative value in the adjustment fields for these deductions.
	Up to Protected Earnings	Student/Postgraduate loan value will be determined up to the payee's protected earnings value. The remainder will not be carry forward to the next pay period. The value that could not be deducted will be added as a negative value in the adjustment fields for these deductions.

Where the AEO could not be deducted in full or if the Student/Postgraduate Loans could not be deducted in full, the user is informed of this action in the Calculation Report.

The Calculation Report details warnings or errors that are occurring in the pay process that you may need to action or just be aware of.

The calculation report warnings/errors can only be accessed in the active pay batch. Once the pay batch is closed, the warnings/errors will no longer be available. Should you wish to keep a record of the calculation report, you can use the standard feature of exporting the report to excel and saving the information externally to FastTrack360.

How the Admin Fee is Processed

You can decide if you wish to deduct the £1 admin fee for processing AEOs from the payee. This is configured against the Deduction Header in the Trigger Deduction. You do not need to apply a separate payee deduction for the admin fee as there are circumstances as to when the admin is applied. These rules are determined by FT360 and are as follows (if the trigger deduction for the admin fee has been applied):

The admin fee will be deducted if the AEO has been deducted. If the payee did not have the AEO deducted perhaps because their earnings were too low, the admin fee will not be deducted.
If the payee has multiple AEOs the system will deduct £1 per AEO and will be totalled in 1 row in the net deduction stage.
If you are processing multiple pay batches for the same payee in the same pay period, the admin fee will only be deducted once and not for each pay batch.
If you are processing a missed pay period as an adjustment pay batch and you have already processed a normal pay batch with an AEO deduction, the admin fee will only be deducted once.