Attachment of earning orders occur if an employee is in debt. One or more of their creditors may have taken court action against them and got a county court judgment (CCJ) or other court order. A court order means they have to pay back the money they owe either in instalments or in full by a certain date. If they don’t keep to the terms of the court order, their creditor can take further action to try and get back the money they owe.
There are several ways they might try and do this. If they are working, their creditor might try to get a court order that takes money from their wages and pays it directly to the employee’s creditor. This is called an attachment of earnings order. Types of attachment orders include Attachment of Earnings Orders (AEOs), Council Tax Attachment of Earnings Orders (CTAEOs), Direct Earnings Attachments (DEAs) and Deductions of Earnings Orders (DEOs).
All attachment orders have certain procedures prescribed in the relevant legislation that employers must follow. Failure to follow them can lead to penalties being imposed. The procedures that must be followed are usually set out in documents accompanying the order from the court, Department of Work and Pensions (DWP), and so on.
These procedures include, for example:
- Notifying the order’s originating source of various events (such as the employee leaving the employment)
- The date by which the employer is required to pay over to the payee (such as the originating court) the amounts deducted from the employee’s earning.
To work out how much an employee can afford to pay their creditor, the court works out the minimum amount of money you need to live on. This is called the protected earnings rate. The amount owed to your creditor can only be taken out of the money they earn above this amount. If they earn less money one week or month, the amount paid to creditors will be less, as their income can’t fall below what’s been set by the court.
Creditor won’t be able to get an attachment of earnings order if:
- the amount you owed is less than £50, or
- the take-home pay is always below the protected earnings rate.
The attachment of earnings order will show both the amount of the weekly or monthly deductions to be made by the employer to the creditor, and the protected earnings rate the court has set.
Further information is set out in ‘Attachment Orders – A guide for employers’, which is issued by H M Court Services and is available on GOV.UK.