In Scotland, there are more than just one type deduction that can be made from your wages for debts. In fact, there are seven different types of earnings arrestments.
They all are different and involve different procedures. The types of debt they are used for and the agencies that can carry them out are also different.
Below is a full summary of the type of wage arrestments you can have in Scotland.
As the legal basis for these arrestments are different, and don’t all involve Sheriff Officers, they are not all classified as types of Diligence, which is a legal term used in Scotland to describe types of enforcement that Sheriff Officers use to recover debt.
When your wages are being arrested, it is important to know the type of arrestment being used, as this influences how they are dealt with by money advisers.
An Earning Arrestment is what is commonly known as a wage arrestment and is carried out by Sheriff Officers for any type of debt which a Sheriff Court order (decree) has been granted, including debts for Council Tax arrears that are constituted by a Summary Warrant.
They can also be executed for debt that’s have been registered for preservation and execution, using the Summary Diligence procedure (these tend to be landlord guarantees, business debts and credit union debts).
For an Earning Arrestment to be executed, a Charge for Payment must be first served by Sheriff Officers. The Charge gives the person 14 days to repay the debt in full. If the debt isn’t paid, an earning arrestment can be carried out.
How much your employer takes from you wages each week or month is specified in legislation (Wage Arrestments: How Much they can Take).
Wage arrestments can be stopped by using certain legal remedies. These are Time to Pay Orders, Debt Payment Programmes under the Debt Arrangement Scheme, Protected Trust Deeds and Sequestration (Bankruptcy).
Conjoined Earning Arrestment
A Conjoined Earning Arrestment is carried out when multiple (more than one) creditor wants to arrest your wages.
What the Conjoined Earning Arrestment does is it manages the conflicting interests of your competing creditors who, all at the same time, want to arrest your wages. It is managed by the Sheriff Clerk of your local Sheriff Court, rather than the Sheriff Officer.
The way a Conjoined Earning Arrestment works is all your creditors can arrest your wages at the same time and your employed must send the funds he is required to deduct to the Sheriff Clerk.
It does not, however, increase the amount you must pay. The amount deducted is the same amount that is deducted if it was just was one creditor arresting your wages. It is just divided up between the various creditors who are arresting your wages.
Conjoined Earning Arrestments can include an amount that is being arrested under a Current Maintenance Arrestment, but not other amounts being arrested by other Arrestments.
Current Maintenance Arrestment
Current Maintenance Arrestments are made after a Maintenance Order has been made by a Court Order (not just a Scottish Court) or under Acts of Parliament, where the payment plans have been defaulted on (such as when a Maintenance Assessment has been made under the Child Support Act 1991).
Maintenance Orders can be for the maintenance of a child, but also to support a former partner after the dissolution or annulment of a marriage or civil partnership.
They are executed by Sheriff Officers and the amount taken is based on the amount the Earning Arrestment Schedule states can be taken or any net earnings over £17.42 per day, whichever is the lesser.
Current Maintenance Arrestment are only for the arrears that have arisen from missed payments under a Maintenance Order. Any ongoing payments due under the Maintenance Order remain due, even after the Current Maintenance Order has been put in place.
Deduction from Earnings Orders (DEOs)
Deduction from Earning Orders (DEO) are made by the Child Support Agency (CSA) or the Child Maintenance Service (CMS).
They are made against the parents of children, who don’t live with the children and who
- Should be paying child maintenance, but are not paying it; or
- Have accrued arrears; or
- Have arrears and are not paying what their ongoing liability is.
DEOs are sent to your employee who must deduct the sum from your earnings, each week or month.
A Deduction from Earnings Order can consist of two elements. These are:
- The current amount you should be paying; and
- An amount towards the arrears you owe.
In this sense they are different from Current Maintenance Arrestments, in that they may not just be for arrears.
How much you pay depends on what the DEO is for. If it is for your ongoing liability, you must pay the amount you have been assessed to be liable for. If it is for arrears, then there is a formula that the CSA and CMA use based on your net earnings. They don’t take into consideration any other debts or outgoings you have. If the Order is for both arrears and ongoing liabilities, both amounts can be taken if you have sufficient income available.
The Child Support Agency and The Child Maintenance Agency must leave you with at least 60% of your net income (that is 60% of the amount you are left with after tax and national insurance deductions).
Direct Earning Attachments
A Direct Earning Attachment is a type of arrestment that can be used by Local Authorities and the Department of Works and Pension to recover benefit overpayments.
The maximum amount that can be arrested each week or month is 40% (Higher Rate), although the Standard Rate is normally used, which means the maximum amount that can be taken in 20%.
However, Direct Earning Arrestments can also be applied at a fixed rate, where the DWP or Local Authority believe that would be fairer.
Direct Earning Arrestments are not applied by Sheriff Officers and no court order is required.
They are also non-priority Arrestment Order, which means where Earning Arrestments are being made, they must give them priority, so that you are not left without 60% of your net earnings. This also applies if student loan deductions are being made from your wages.
Debtor Contribution Orders (Bankruptcy)
Your employer can also be required to make payments from your earnings because you have been made Bankrupt and a Debtor Contribution Order has been applied and either you opt for the deductions to be made or you refuse to make the payments willingly.
Debtor Contribution Orders are applied where you have been declared bankrupt and the Accountant in Bankruptcy believe you can afford to make payments. If you refuse to make the payments the Debtor Contribution Order can be served on your employer to deduct the amount that the Order says you should be paying and instruct your employer to pay it over to your Trustee.
Payment Instruction to Employers (Trust Deeds)
A Trustee in a Protected Trust Deed can also issue an instruction to an employer to deduct contributions from your earning to make payments to your Protected Trust Deed. Like with Debtor Contribution Orders in Bankruptcy, the amount that is taken is the amount your Trustee in your Protected Trust Deed believes you can afford.
Again, you can request the contributions are taken from your wages, or if you stop making payments to your Trust Deed, your employer can be instructed to make them to your Trustee.
If you disagree with the amount the Trustee believes you can pay, you can request they review the amount they believe you should be paying. If you still don’t agree with them after they have completed the review, you can ask the Accountant in Bankruptcy carries out a review and issues a Direction to the Trustee.