Direct Earnings Attachments change

06 March 2015

The DWP (Department for Work & Pensions) has confirmed a change in regulations (The Social Security (Overpayment and Recovery) Amendment Regulations 2015) that will mean they can issue a Direct Earnings Attachment to deduct at a maximum rate of 40%, rather than the current maximum of 20% in cases where the person has been prosecuted for the offence which gave rise to the benefit overpayment.

Although the regulations come into force from 8 April 2015, the DWP will be working with the CIPP and the BCS who represent the payroll software industry on its implementation. Whilst Ministers would like to utilise the new regulations as soon as possible, they do recognise that without updated payroll software this would be difficult for employers to administer and it is likely software will not be ready until April 2016.

Once the changes are implemented it is expected the DWP will issue a “stop notice” where a 20% DEA is in place and replace it with a new 40% DEA in appropriate cases, there will be no responsibility on employers to automatically increase the DEA rates. Further information for employers will be available after further consultation has taken place. A DWP official will be attending the next British Computer Society – payroll group meeting on 25 March 2015 to enable payroll software providers the opportunity to discuss the new requirements. The CIPP will also be in attendance at this meeting.