Direct earnings attachments and insolvency
If the client has a DEA and opts for a formal debt solution because of their circumstances, the DWP says it will not recover benefit overpayments.1DWP, Benefit Overpayment Recovery Guide, v3.20, January 2024, available at Recognised debt solutions include:
•Full Administration Bankruptcy (see here); •Minimum Asset Process bankruptcy (see here); •protected trust deeds (see here).
In all cases, DEAs are lifted once the solution commences. The DWP writes to the employer advising them to stop the DEA. Any monies taken after this will be refunded to the client, even if the client has a fraudulent overpayment.
If the DEA was for a fraudulent overpayment that does not discharge, the DWP or local authority may begin the DEA when the client is discharged from their formal debt solution. It should, in theory, write to the client again and offer them the ability to make an arrangement before applying for another DEA.