Understand Direct Earnings Attachment
From April 2013, the Department for Work and Pensions (DWP) introduced the Direct Earnings Attachment (DEA). This allows the DWP to recover debts by asking employers to make deductions from their employees’ earnings and pay those deductions to the DWP, without the need for court action. The DWP’s overall aim and policy, is to continue to support people who owe money to manage their debt effectively. The DWP seeks to agree an acceptable, flexible and sustainable voluntary payment arrangement with people without causing undue hardship.
The DEA is a process for collecting outstanding debts from people in work where a voluntary arrangement has not been possible. The DWP expects to use DEAs only when people do not get in touch or are unwilling to agree a recovery plan.
You can't use a DEA where people are:
Self-employed.
In the armed forces.
Merchant seamen.
Aged 17 or under.
Over retirement age.
The rate of deduction from salary is based on the level of a person’s net DEA’able earnings and is subject to statutory limits. The maximum possible deduction to repay overpaid benefit is 20 per cent; although a person can never be left with less than 60% of their net DEA’able earnings, after considering any other DWP deductions in place.
For our full guide including screenshots and examples, please read more
Set Up
The following describes the setup of a DEA deduction. You may find that several deductions are needed in order to cater for different configurations (eg value based, weekly percentage, monthly percentage) and for different deduction orders.
Table Maintenance
The DEA percentage levels are on the Table Maintenance table for weekly and monthly pay frequencies. To check which table to use, follow the steps below and cross reference the system values with the order letter:
In Access Pay & Bill, click the Payrollmenu, then hover over Definitions.
Click Table Maintenance then find the entry.
📌 Note: This is for information only and should not need to be amended.📌 Note: This is for information only and should not need to be amended.
Deduction Maintenance
📌 Note: A DEA is a non-priority deduction, but you should not leave the order to deduct as 999, as it should be taken ahead of other deductions not mentioned below.
The following describes how you need to set up a DEA. An existing deduction may be used if suitable, though it is advisable to create a new deduction rather than altering an existing deduction unless you are certain the existing deduction is no longer used or needed.
In Access Pay & Bill, click the Payroll menu and hover over Definitions.
Click on Deduction Maintenance, then press Ctrl+I to insert/create a record.
Set the Deduction to DEA.
Ensure the box is ticked.
Set the Order to Deduct to your requirements. A DEA must be deducted after Income Tax, National Insurance, Superannuation contributions, superannuation does not include Stakeholder Pension contributions and freestanding AVCs, and other priority deduction orders.
Double click within the No of Excluded Payments field (this must be done in modify mode once the new deduction has been created) and add lines as necessary to exclude relevant payments:
SMP.
SAP.
OSPP.
ASPP.
Sums paid to reimburse expenses wholly and necessarily incurred in the course of the employment.
Statutory Redundancy Payments.
Set the Default Basis to Value or Perc. as required. This shown on the DEA order issued by the DWP. Percentage based DEA deductions calculate on net value, this cannot be amended.
Click on the Details 2 tab.
If the DEA is percentage based, select the appropriate Table, ensure the Table Method is Whole, and Table Basis is Net.
Set the Balance Type to Reducing.
Click on the Details 3 tab.
If you wish to charge an admin fee of up to £1, enter the Default Trigger Deduction and Default Trigger Input.
If you use third party payments, enter the Default TPP Number.
Standard Deduction Maintenance
Once a suitable deduction has been created or identified, this needs to be applied to the worker.
In Access Pay & Bill, click the Worker menu and hover over Payroll Details.
Click on Standard Deduction Maintenance, then press Ctrl+I to insert/create a record.
Enter the Worker, Deduction Reference and Date Effective.
For value based deductions only, enter the Input Amount.
Click on the Details 2 Tab, and set the Protected Earnings % to 60.
Set the Capital Balance to the total amount that is to be recovered. If this field is set to 0.00, a deduction won't be made and the worker won't appear on the DEA report that you send to the DWP.
All other defaults such as Trigger Deductions and TPP number are defaulted from the deduction that you previously set up. You can change these if required. The deduction will be applied during main calculation, subject to the date and values entered.
DEA Report
A DEA Payment Schedule is required by the DWP Debt Management Department each time a DEA is calculated including where no deduction has been made. The system will output all workers who have been calculated onto the payment schedule.
To process the report follow the steps below:
Click Payroll, then click Reports.
Click DEA Report Extract.
Enter the period that needs to be run.
📌 Note:
You can only run this report after period close. As the reason for non deduction could vary from period to period, you must run the report for each period.
The system generates the appropriate reason code for non deduction, you can change this to another code if required. This is currently using the same code reasons as CMEC non deduction reasons.
You need to export the report as a CSV and send it to the DWP Debt Management Unit along with the payment either via cheque or BACS. The payment must reach the DWP by the 19th day of the following month on which the payment was taken.