Unfortunately, due to the late notification of this legislation, many, if not all, payroll software systems will not be able to support employers from the effective date, so manual workarounds will be required. The guide will be available on the DWP’s website shortly, but in the meantime please find the PDF DEA Employer Guide at the CIPP website.
NEW POWERS TO RECOVER DEBTS OWED TO DWP
7 February 2013
From April 2013, DWP will be introducing legislation to extend their existing powers to recover money owed to them by customers who are in employment.
The Direct Earnings Attachment (DEA) will enable DWP to recover debts by asking employers to make deductions from earnings and pay those deductions to us without the need for court action. The overall aim and policy of DWP is to continue to support those owing us money to manage their debt effectively. We will always seek to agree an acceptable, flexible and sustainable voluntary payment arrangement with the customer without causing undue hardship.
Type of debts to be recovered
All debts owed to the Department, including Social Fund loans.
When DEAs will be used
The DEA is a process for collecting outstanding debts from people in employment where a voluntary arrangement has not been possible. DWP envisage using a DEA only in circumstances where customers fail to make contact or are unwilling to agree a recovery plan. The new DEA process will be piloted in DWP from April 2013. Under the Pilot, DWP will issue a new letter advising customers to make contact with us to discuss payment options. The letter will also explain the possible outcomes should the customer not respond or if acceptable recovery arrangements cannot be agreed. These outcomes will include the possibility of a DEA.
The new DEA process will be continually monitored and evaluated throughout the pilot and it is planned to be fully implemented by April 2014.
When we will not use a DEA
A DEA will not be used where the customer is: self-employed, in the armed forces or is a merchant seaman; aged 17 or under or over retirement age
Rate of recovery
The rate of deduction will be based on the level of net earnings and will be subject to statutory limits. If the customer were to subsequently claim that the rate of deductions under the DEA was too high in their case, they would be expected to provide full details of their income and expenditure. DWP may then be willing to review the amount deducted under the DEA.
If a DEA is implemented in a customer’s case, employers may charge an administration fee. This will not exceed £1 for each deduction from earnings.
CIPP Policy News Journal
12/04/2013, Page 23 of 362
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