An Employer's Guide to Direct Earnings Attachments (DEA) for the Collection of Housing Benefit Overpayments

Stockton-on-Tees Borough Council is responsible for recovering money owed to it in respect of debts arising under the Social Security Administration Act 1992.

From April 2013, Local Authorities have been given the power to recover overpaid Housing Benefit by deductions from earnings without the need to apply for a court order. This is done by using a Direct Earnings Attachments (or DEA).

Local Authorities were given this power by The Social Security (Overpayments and Recovery) Regulations 2013.

1.1 Why is the Council using a DEA?

Not everyone enters into a voluntary repayment agreement. DEAs give us the opportunity to recover overpaid benefits from debtors who are employed if they either refuse to repay, are unable to agree an acceptable repayment plan or who have defaulted on a voluntary repayment arrangement.

1.2  Do employers have to implement a DEA for the Council?

Yes, you have a legal obligation to do so unless you are a new business (which starts between 8 April 2013 and 31 March 2014), or a micro business (having fewer than 10 employees). In such cases you are not obliged to operate a DEA although you may do so if this is agreed with your employee.

If you fail to comply with your duties, you could be subject, on conviction, to a fine of up to £1000.

1.3 What if my payroll software has not been updated to allow for DEAs?

As this is a new procedure, it may be that your computerised system has not yet been updated to deal with DEAs. The Department for Work and Pensions is currently working with the Chartered Institute of Payroll Professionals, Employer Representatives and Payroll Software providers in order to develop the right long term solution but until your software is changed, you will also need to follow the instructions below as well as the general guidance in this document. Once your system is updated, the information on this first page may no longer be needed.

Until your software is updated, if you are using a computerised payroll system and you receive a request to set up a DEA you will need to:

a. manually calculate the amount to deduct from earnings. Please see how to do this in section 6. How is a DEA calculated?

b. manually check whether there are any other orders currently in place, as the DEA may take priority over these. Please see a full list of the orders and how they may impact on a DEA in section 8: Your employee has other Court Orders against them

c. in cases where the DEA does take priority over another order, consider whether other orders need to cease or deduction amounts be recalculated

d. ensure, in cases where other orders cannot be applied that these are removed manually from the payroll system and subsequently re-instated once a DEA ceases

If, after reading through this guidance, you still have unanswered queries, please contact the Recovery Team on 01642 526820.