Attachment of earnings orders are used to enforce non-payment of county court judgments or unpaid magistrates’ fines.
They are administered by employers, who must meet certain obligations for the order to be effective.
What is an attachment of earnings order?
Where a creditor has obtained a county court judgment (CCJ) for monies owed by a debtor, such as for a bank loan, credit card or mortgage arrears, and that debt is not discharged as per the terms of the court order, the creditor can take legal action against the debtor to recover what is owed.
One of the ways a creditor can do this is to ask the court to order the debtor’s employer to make regular deductions directly from the debtor’s wages and pay this amount to the court in order to reduce the outstanding debt. This is known as an ‘attachment of earnings order’.
The court can order deductions to be made directly from a debtor’s earnings if:
- They are behind with the payments on their CCJ,
- They are an employee, and not self-employed or on benefits, and
- They owe more than £50 on the judgment sum.
The court cannot make an attachment of earnings order if the debtor’s take-home pay is below a certain level. This is called the ‘protected earnings rate’.
If the application for an order is successful, the amount to be taken by the employer is set by the court.
This should then be deducted by the debtor’s employer each time the debtor gets paid, and sent by the employer to the court that made the order, to be forwarded to the relevant creditor(s).
In another scenario, someone who has been fined by the magistrates’ court, for example, for a driving offence or non-payment of a fixed penalty notice, and that person fails to make the ordered payment or instalment, the court can again make an attachment of earnings order.
In these cases, the amount will be set at a fixed percentage of the debtor’s take-home pay using a sliding scale, where the more the debtor earns, the higher the amount taken.
When is an attachment of earnings order used?
An attachment of earnings order can be used as a method of enforcement to recover civil judgment debts, non-payment of maintenance and unpaid fines, and can be imposed by the county court, the high court or the magistrates’ courts. This type of order can also be imposed by a local authority for outstanding council tax arrears.
Additionally, an employer may be asked to make deductions for unpaid child maintenance to the Child Maintenance Service, although this is known as a ‘deduction from earnings order’, or to deduct benefit overpayments an employee owes the Department for Work and Pensions (DWP), known as a ‘direct earnings attachment’.
What is an offer of payment?
Once a creditor has applied to the county court for an attachment of earnings order, the court will write to the debtor requesting that payment be made in full.
If the debtor cannot afford to discharge the debt, they must complete and return the enclosed statement of means (form N56), together with their most recent wage slip. The debtor will be asked to provide details of their employment and financial circumstances, including other debts or court orders.
Form N56 makes provision for the debtor to make an ‘offer of payment’ that they can afford.
If the debtor would like an opportunity to pay the debt voluntarily, without their employer being ordered to make deductions from their pay, they can ask for a suspended order by ticking the relevant box in this section and providing reasons why.
A valid reason for a suspended order could include being dismissed if their employer discovers they are in debt.
If the court accepts the debtor’s reasons for suspending the attachment of earnings order, it will be on the condition that they make the agreed payments.
These can be made by the debtor directly to the creditor rather than to the court, without the employer being notified.
If the debtor fails to reply to notification of an application for an attachment of earnings order, they may receive a summons to attend court for questioning. If they continue to ignore the court’s correspondence, a warrant could be issued for their arrest, and the debtor could be prosecuted and sent to prison. It is a criminal offence for a debtor not to complete the form or to give false information to the court.
Where the debtor has failed to return form N56 and the creditor knows the address of the debtor’s employer, the court can also contact the employer directly to ask them to provide details of the debtor’s earnings.
How does an employer make the deductions?
An employer will be legally required to make deductions from an employee’s wages if the court makes an order to this effect. An attachment of earnings order is legally binding, and non-compliance may result in a fine or even imprisonment.
If the attachment of earnings order has been granted, the court will send a copy of the order to both the creditor and debtor, and the debtor’s employer.
The order will state:
- The amount owed by the employee.
- The normal deduction rate, ie; the amount to be deducted from the employee’s wages.
- The employee’s protected earnings rate, ie; the minimum amount that the employee must still take home, where the employee’s minimum take-home pay must not fall below this rate.
- The frequency of payments to be made, usually weekly or monthly.
- Who the payment must be made to.
In most cases, the payment will need to be made to either the Centralised Attachment of Earning Payments (CAPS) office or to the magistrate’s court that issued the order.
It is possible for an employer to ask the county court to change how often deductions are made, depending on when an employee is normally paid, for example, from weekly to monthly.
If, on the other hand, the order was made by the magistrate’s court, then only the employee can ask the court to change the intervals at which the payments must be made.
The employer will be required to start making deductions from their employee’s wages starting from the next time that the employee is due to be paid, unless it is within the next 7 days.
The net effect of this is that the employer will pay the employee reduced wages from that date, with the balance to be paid directly to CAPS or the court.
Once the debt has been paid in full, the employer should be notified in writing that the order has been discharged, although they can still make the deduction if they are due to pay their employee within the next 7 days. The employee will subsequently receive any refund due.
What are the two types of attachment of earnings order?
There are two types of attachment of earrings order: a priority order and a non-priority order.
The order should state whether it is a priority order. If the order is silent, it will be a non-priority order. A priority order is used for non-payment of maintenance or fines, whilst a non-priority order is for unpaid civil debts following a county court judgment.
The way that deductions are calculated is different for each type of order. For a priority order, the unpaid difference should be carried to the next payday, whilst for a non-priority order, the unpaid difference does not need to be carried over.
For employees with more than one type of order, the employer should deduct any priority orders first, in the order the employee received them, followed by the non-priority orders taken in date sequence.
It is also possible to apply to the court to combine two or more non-priority orders into a single order. This is called a ‘consolidated attachment of earnings order’, where a single deduction is made by the debtor’s employer, and sent to the court to be divided amongst the various creditors.
How does an employer make deductions for a priority order?
When making deductions for a priority order, an employer should apply the following steps:
- Calculate their employee’s earnings.
- Set aside the employee’s protected earnings.
- Deduct, if at all possible, the amount specified in the order.
- Pay their employee the remainder of their earnings, informing them in writing of the deduction made (although a detailed payslip may suffice).
- Send the deducted amount to the address stated in the order.
The employer must pay the employee at least their protected earnings rate, as set out in the order. If they cannot deduct the full amount, the difference must be carried over and deducted on the next payday.
Each time the employer makes a deduction, they may take an extra £1 from their employee’s earnings towards their administrative costs for operating the order, even if this reduces the employee’s income below the protected earnings rate.
An employer cannot take the £1 administrative charge if they do not make a deduction, or if it takes the employee’s income below the National Minimum Wage (NMW).
How does an employer make deductions for a non-priority order?
When making deductions for a non-priority order an employer should:
- Calculate their employee’s earnings
- Set aside the employee’s protected earnings
- Deduct, if at all possible, the amount specified in the order
- Pay their employee the remainder of their earnings, informing them in writing of the deduction made (although a detailed payslip may suffice)
- Send the deducted amount to the address stated in the order
The employer must pay the employee at least their protected earnings rate, as set out in the order. If they cannot deduct the full amount, the unpaid difference does not need to be carried over to be deducted on the next payday as it would with a priority order.
The employer can again deduct their £1 administrative costs, even if this takes their employee’s income below their protected earnings rate, so long as this does not take them below the NMW.
Attachment of Earnings Orders FAQs
How much can an attachment of earnings take?
The amount to be taken by an attachment of earnings order will be set by the court making the order. This is called the normal deduction rate. The court will also set what’s known as a protected earnings rate, where the employer cannot take the deduction, or the full deduction, where this would take the employee’s take-home pay below this protected rate.
Is an attachment of earnings order a CCJ?
A county court judgment or CCJ is the order made by the court declaring that a monetary sum is owed and the amount of that sum, with any interest due. If the outstanding debt is not discharged by the debtor, the creditor can ask the court to order the debtor’s employer to make deductions from their wages and pay this into court to reduce the debt in instalments. This is referred to as an ‘attachment of earnings order’.
How do I stop attachment of earnings?
To stop an attachment of earnings order, the debtor can ask the court for the attachment to be suspended using Form N56, instead voluntarily agreeing to a payment plan with the creditor. A debtor can also apply to the court within 14 days of an order being made to dispute the rate of deductions, or to amend the terms of an existing order where their circumstances have changed, for example, if their wages have been reduced or their outgoings have increased.
Can attachment of earnings be deducted from benefits?
An employer is only entitled to make deductions from certain types of earnings, known as attachable earnings. This includes wages and salary, pension payments or statutory sick pay. Income that is exempt from attachment of earnings orders include tax credits, statutory maternity, paternity and adoption pay, or any pension or allowance paid for disability.