What is a Direct Earning Attachment?

A Direct Earning Attachment is a UK wide procedure that can be used by creditors to recover tax credit overpayments or overpaid benefits they are owed, directly from the debtor’s wages. This procedure does not require a court order.

The Department of Work and Pensions (DWP) covers a multitude of benefits, all of which can incur benefit overpayments which may be recovered through the use of a Direct Earnings Arrestment.

The local authority can also make use of this procedure to recoup housing benefit overpayments. In this case, the Local authority should be one to contact your employer to inform them that the DEA will be applied.

If you find yourself faced with a DEA, making use of government legislation may lead to your unsecured debts being written off, your monthly payments being reduced and less pressure from creditors seeking repayment.

In the event that a DEA is applied, the DWP or Local Authority have three options available to them. They can:

  • Apply to get a Direct Earning Attachment at the Standard Rate
  • Apply for the DEA at the Higher Rate
  • Request a fixed rate DEA.

When it comes to the amount coming out of your wages, this can differ depending on the rate at which the DEA is applied. A maximum of 20% can be taken from a person’s wages at the standard rate, whereas the higher rate can go up to 40% of your net earnings. However, the DEA will never leave you with less than 60% of your total net income.

The DEA should not apply in cases where the priority arrestment leaves you at under 60% of your net earnings. And in cases where it does not, but would if both were applied together, then a partial DEA should be applied. Student loans should also be considered, as they would take priority.

You can make a request for the order to be stopped if you anticipate that the repayments will lead to hardship due to being unable to keep up with other financial commitments, like bills. Do this by contacting your creditor directly as soon as you are made aware of their intention to apply for an attachment of earnings order. Doing this may lead to you coming to an alternative agreement for a payment plan.

If your creditor decides to go ahead with the order you will receive a ‘replying to an attachment of earnings application’ or a ‘N56’ form. This must be completed before the deadline and returned to the court. It is vital that you do not ignore this form. Failing to do so is a criminal offence, as is filling in the form with false information – meaning you could end up going to prison.

Fill in the form with the requested details; your nearest Citizens Advice can provide advice for filling it in. In doing this, you can tick a box indicating that you believe the order should be stopped due to your circumstances.

This is known as a ‘suspended attachment of earnings order’. To make this request you will need to provide your reasons for believing the DEA should be stopped. These may include 1) struggling to make payment of your bills and 2) leading to the loss of your job. Your creditors should be informed by you of any debt advice you are receiving, including your application for a suspended order, as well as your reasons for doing so.

If you find yourself without a job for a significant amount of time, you may need to fill in a form to ask the court to cancel the order. Simply call the courts to find out what you need to do.

Upon your request, the courts may allow a ‘consolidation attachment of earning order’ which would let you pay one monthly payment rather than paying creditors separately. Since your payment then goes through the court, this would end up costing you more.

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