A Direct Earning Attachment (DEA), is a way for the Department for Work and Pensions (DWP) to take money directly from your earnings if you’ve been overpaid benefits.
If you’re struggling with debt, it’s important to know how DEAs work and how you can avoid one. Keep reading this guide to learn more about DEAs and how they might impact you.
What is a direct earnings attachment (DEA)?
A Direct Earnings Attachment (DEA) is a term used in the United Kingdom to describe the process where the Department of Work and Pensions (DWP) is able to take money directly from an employee’s earnings in order to recover any overpayment of benefits.
This procedure allows the Government, or the local authority, to efficiently recover debts it has previously been unable to collect by working directly with the debtor’s employer.
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Why do people receive direct earnings attachments?
Benefit overpayments
You may be issued with a Direct Earnings Attachment (DEA) if the Department for Work and Pensions (DWP) decides that you have been overpaid benefits or income tax credits from them, or you owe money to local authorities.
You might also receive a DEA if you owe money to any other government department such as HMRC, or if you have avoided previous debt collection procedures.
Because a DEA allows your employer to deduct the money owed directly from your wages, the DWP can recover money that is owed to them quickly and efficiently.
Who collects direct earnings attachments?
DWP debt management (via you employer)
If you are subject to a DEA, the DWP will get in touch with your employer and work directly with them in order to recover the money owed.
What happens when DWP gets in touch with my employer?
National insurance details, calculation, and deduction of pay
The first thing your employer will do is collate your personal information, including your national insurance number, which they will need in order to deduct payments.
It will then be the responsibility of your employer to:
- Calculate how much should be deducted from your pay, in accordance with DWP guidelines.
- Make sure that you have no other existing debt orders to pay which would take precedence over your DEA payment.
- Inform you that a deduction will be made from the employee’s wages.
- Deduct a portion of your salary and use it to pay DWP.
Your employer will then continue to make deductions and payments to DWP until the debt is repaid in full.
What counts as earnings for DEA deductions?
The DWP can deduct money from the following types of income as part of a Direct Earnings Attachment:
- Employee’s earnings, wages, or salary, including any bonuses or overtime
- Commission and other fees
- Occupational pensions, if your workplace pension contributions are paid with wages or salary
- Statutory sick pay
- Compensation
What earnings are exempt from DEA deductions?
The following types of incomes are exempt from a DEA:
- Statutory adoption pay
- Statutory maternity pay
- Ordinary paternity pay or additional paternity pay
- Government money, including benefits or state pensions
- Your guaranteed minimum pension
- Business expenses
- Any money earned as a member of the Armed Forces
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How much will I be charged during a direct earnings attachment?
Your DEA will be based on a percentage of your net earnings, so how much you pay will ultimately be dependent on how much you earn.
Standard rate vs higher rate
A DEA can be charged based on two different rates: a standard rate and a higher rate.
The standard rate tends to be reserved for lower earners, whereas the higher rate is assigned to higher earners or people found guilty of fraud or other financial offences.
Protected earnings order
In order to protect debtors and ensure that they are left with a level of income that allows them to pay for the essentials, your income beyond a certain threshold will be protected from a DEA.
Regardless of which rate you are charged at, a DEA should never exceed more than 40% of your take-home pay – otherwise known as your net earnings. This is the amount of money you are left with after tax, pensions, and other essential deductions have been made.
If it looked like a DEA would leave you with less than 60% of your net income, a mechanism known as a protected earnings order will be deployed in order to stop that DEA from being applied.
DEA deductions for benefit overpayments
DEA deductions can be made to recover overpayments from benefits including:
- Universal credit
- Working tax credit
- Child benefit
- Jobseeker’s Allowance (JSA)
- Employment Support Allowance (ESA)
With regards to overpayments of housing benefit, these are usually collected by county court bailiffs or sheriffs officers. This can be distressing, so if you’re worried you may have received housing benefit overpayments, make sure to contact your local authority in the first instance.
Can I put a stop to a direct earnings attachment?
There are two ways to stop a direct earnings attachment.
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Challenge the DEA
If you don’t agree with the DWP that you have been overpaid benefits, you can challenge the DEA by raising a complaint directly with the creditor – whether that’s the DWP, HM Revenue & Customs, or your local authority.
Failing that, you can escalate your complaint to the Financial Ombudsman, the governing body which oversees the operations of DWP, HMRC, and local Government.
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Agree to a repayment plan
The other way to put a stop to the DEA is by coming up with a repayment plan for the money owed.
You can contact DWP, HMRC, or your local authority and offer to repay what you owe in full, either upfront or over a set period of time. As long as you can demonstrate that you’re willing and able to repay the sum, they should be open to the idea of a gradual payment plan.
Where can I get help if I’m worried about direct earnings attachments?
If you owe money to the Government and you haven’t been able to come up with a repayment plan, you may be worried about facing a DEA, debt collection procedures, or even legal action.
We can help. At Your Debt Expert, we specialise in everything from reliable debt advice to formal debt solutions which can help you repay what you owe at a rate that suits you.
To get more information on how we can help you put debt in the past, just get in touch with one of our friendly debt advisors today.
