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An Attachment of Earnings Order is issued by a Court and will instruct an employer / contractor to deduct an outstanding debt from an employee via their wages. The employer / contractor is legally required to collect the stated amount. Deductions are always taken from the employee's attachable earnings. The employer / contractor must then pass the deductions on to the issuing court. An employer / contractor can deduct a £1 administration fee to cover its costs.
In this screen you can modify the attachments details, If an Attachment to Earnings Order has been issued to the employee. Once entered, attachments will act as an automatically recurring item. Deductions will be made from the employees pay in any pay period run and updated after the Effective from date so long as the employees pay is above the protected earnings level for attachments.
Although the deduction is recurring it will only be made if the user ticks to select the employee concerned to do the payrun and then clicks on the Process Pay button. Attachments will only be taken after the tick is made. The user needs to remember to tick the employee if anything needs to be done. Recurring items will not run until the employee concerned in the particular period is ticked to run the payrun.
The rules governing the order in which AEOs can be deducted from an employee are complex. To make life easier for its users this service has incorporated these rules in its package. You simply enter the details of your employee's different AEOs and this service will ensure that they are deducted in the correct sequence in compliance with the above.
The HM Revenue & Customs specifies the precise order in which employers / contractors should take AEO deductions from employees.
In summary, if an employee has more than one AEO, deductions must be taken in date order. However priority orders must be deducted before non-priority orders.
Orders made under the 1971 Act, CCAEO, CTAEO and DEO, issued after March 1993 have equal priority and are deducted in date order. Non-priority orders made under the 1971 Act are deducted after priority orders, in date order.
Where there are orders dated pre and post 31 March 1993 the order of priority is as follows:-
Priority orders under AEA 1981 and DEO's in date order.
Non priority orders under AEA 1971 in date order, after (a)
CCAEO dated pre 1 April 1993 and CCAEO dated after 31 March 1993, pre 1 April 1993 AEO's and CCAEO's must be cleared before any others of a later date can be paid.
Student loan deductions are made after any priority orders, whatever their date, but before non-priority orders. A CTAEO or CCAEO takes priority over Student Loan deductions. If an employer / contractor has to apply either of these orders, Student Loan deductions must not be made.
Payrun > Payment Frequency (Weekly/Monthly/2 Weekly/4 Weekly/Quarterly/Annual/Bi-annual) > Deduction & Pension > Attachment Order > Edit
Fields marked with an asterisk (*) are mandatory.
Record New Attachment
There are 10 common AEOs: -
Click here to view the demo to enter the attachment order.