Scottish Earnings Arrestments – Calculation changes from 6 April 2009Monday, March 23rd, 2009
The Scottish Parliament has approved Regulations that introduce new calculation procedures for Scottish Earnings Arrestments and Current Maintenance Arrestments from 6 April 2009.
Earnings Arrestments are currently calculated using a Table that defines the amount of the deduction that must be made for earnings between defined values. It is a complex Table with nearly 30 different deduction steps. From 6 April 2009, the Table is replaced with a much simpler percentage calculation, as follows:
Table A: Deductions from Weekly EarningsTable B: Deductions from Monthly EarningsTable C: Deductionsfrom Daily EarningsCurrent Maintenance Arrestments are currently calculated on a daily basis by dividing the employee’s net earnings by the number of calendar days in the pay period, setting aside £12 as daily protected earnings and applying the daily deduction rate to the remainder. From 6 April 2009, the daily protection threshold increases to £13.50.
The Scottish Regulations do not require employers to apply these new calculation routines to existing arrestments until they are instructed to do so, unless they choose to do so. As a result, employers may continue to calculate existing arrestments using the old calculations but all new arrestments must use the new calculations.
The timing of this change makes it impossible for payroll system developers to have the new calculations in place for 6 April 2009 and the Scottish Parliament has given no indication as to what employers should do if their systems are not capable of handling the deductions correctly. In addition, the arrangement that allows employers to operate two different calculation methods means that developers have to provide both calculation routines.
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