Attachment Of Earnings Orders (aeos)
and then the following are deducted to calculate attachable earnings: • PAYE Income Tax and NI contributions • some pension or superannuation contributions • deductions for previously received and higher priority AEOs. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS AEOs are classified into two categories, ‘priority’ or ‘non-priority’. For an employer’s purpose the type and the date the order is made determines this. In Scotland it is the type and date received that is crucial. Priority orders are AEOs for fines or maintenance, all child support DEOs and CTAEOs. They are applied by reference to the date of issue, applying the oldest first. After all ‘priority’ orders are satisfied, non-priority orders, for civil debts (1971 Act orders) are applied. If two orders are made on the same day, then the date and often even the time of receipt is considered. It is the employer’s duty to maintain the requisite records in administering AEOs in order to stop deductions on completion of the recovery process. The employer is responsible for administering the order and paying over the sums deducted to the court or the specified recipient. An administration fee of £1 (50p pre-1st April 1981 in England and Wales and pre-5th April 2006 in Scotland), may also be deducted from the employee for each attachment made. This fee is only deductible as long as doing so does not reduce wages below that of the NMW/ NLW in force at the time. (This is because the administration fee is for the benefit of the employer and hence cannot be taken in these circumstances.) Payments by cheque are to be made payable to HMCS (Her Majesty’s Court Service). Protected Earnings Protected Earnings are the amount, which when stated on the order, are the minimum amount below which a person’s net earnings may not be reduced. In the case of a priority order, any balance outstanding of the required deduction as a result of applying the protected earnings may be carried forward and added to the potential attachment due for the next pay period. In all other cases the employer may not increase deductions from subsequent earnings to make up any deficit. issued by a local authority, and whilst they must apply to a Magistrates Court for a liability order, the authority are only required to demonstrate that the council tax is due and that it has not been paid. The court has no power of discretion and must, subject to these criteria, issue an order No printing, copying or reproduction permitted. Please see Child Support DEOs below for the treatment of arrears in respect of those orders and the later section on determining priority of orders. Council Tax Attachment of Earnings Orders (CTAEOs) These were first introduced on 1st April 1989 in Scotland as part of legislation for the Community Charge and were initially termed CCAEOs. Community Charge was replaced by the Council Tax on 1st April 1993 and orders re-styled as CTAEOs. They are: •
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