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Scottish Earnings Arrestments – Calculation changes from 6 April 2009
Monday, March 23rd, 2009
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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 Earnings
Table B: Deductions from Monthly Earnings
Table C: Deductionsfrom Daily Earnings
Current 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.
Further information:
The Diligence against Earnings (Variation) (Scotland) Regulations 2009
Executive Note on the Diligence against Earnings (Variation) (Scotland) Regulations 2009
The UK Payroll News is sponsored by HRD & Payroll Solutions
Andrew Dove says:
March 23rd, 2009
13:54
BASDA HR & Payroll Specialist Interest Group has complained to the Justice Committee of the Scottish Parliament about the lack of notice given for these changes and requested that the legislation is considered for annulment.
They have agreed to add this legislation to the list of orders to be annulled and this will be considered on the 31st March.
On point I would mention about the article, is that software does not have to operate both calculation routines as an employer can operate the new rules on existing orders when they become aware of them. This can be from any source not just the courts.
Andrew Dove
Chairman
BASDA HR & Payroll Specialist Interest Group
Ian Congreave says:
March 23rd, 2009
14:57
Andrew, thank you for this information – I have included some of your points in an item in my next newsletter. I see that the Subordinate Legislation Committee already considered the SI for annulment on 17 March but presumably decided that it was okay at that point.
Ian Congreave
kevin says:
October 25th, 2011
18:49
if i am made redundent will my redundancy money be arressted aswell
Ian Holloway says:
November 4th, 2011
13:44
Hi,
I can confirm that a redundancy payment made as a result of a true redundancy is not treated as ‘arrestable pay’.
Hope this helps,
Ian Holloway