Deduction from earnings orders and diligence against earnings
’Diligence against earnings’ is a collective term for the ways creditors can deduct money directly from the client’s salary to enforce the payment of a debt. The three methods are:
•earnings arrestment (EA) - earnings arrestment is used to make a deduction from the client’s earnings for enforcement of a single debt. A creditor must be in possession of a decree (or relevant document of debt) and must have issued the client with a ‘charge for payment for money’, which must have expired, before proceeding with diligence against earnings. Where the debtor (client) is an individual, the creditor, must also have provided a Debt Advice and Information Package (DAIP);
•current maintenance arrestment (CMA) – a current maintenance arrestment is used to enforce a continuing maintenance obligation, such as a court-awarded divorce settlement or child maintenance payment. A CMA will only be used if the client has failed to keep up with their obligations and has fallen behind on the payments they are required to make. As with an EA, the order is served on the client’s employer, and deductions are made directly from earnings.
The sum to be deducted under a CMA is calculated differently from those deducted under an EA. An EA and a CMA can be deducted at the same time, they are separate diligences;
•conjoined arrestment order (CAO) - an order granted by the court to enforce payment of two or more of the same type of debts, at the same time. For CAOs, the client’s employer is required to make a deduction and pass it to the court to distribute the funds instead of paying it directly. The amount deducted is still the same as it would be for a single arrestment only the sum is divided on a pro-rata basis between the conjoined creditors. If a client has one EA and one CMA, these will continue as separate payments and are not conjoined. In all the above diligences, the Debt Advice and Information Package (DAIP) must be served on the debtor no earlier than 12 weeks before the arrestment is executed.
All of the above diligences take precedence over a DEO, except where the DEO is for current maintenance, this takes precedence over an arrestment for a civil debt. Employers often find this confusing when calculating how much should be deducted, the client should be left with at least 60 per cent of their net earnings after all deductions are made. See Chapter 9 for more information on diligence.