What are Attachment of Earnings and Commitments?
Attachment of earnings is a legal process that allows a creditor to deduct money from a debtor's wages to pay an outstanding debt.
Commitments are similar functional items where employees can pay loans or commit to a salary sacrifice.
Adding Attachment of Earnings in Buddy
Buddy caters for all of the common types of orders and has the calculation methods built in. You would only require to add the correct type of commitments.
Importing In Bulk
Commitments can be imported in bulk using our Importing Employees into Buddy for Migration or Bulk Update feature and selecting the Commitments data format.
The following video guides through the mapping process:
Adding Individual Commitments
To add the AoE types within Buddy:
- Go to People
- Click on the employee for whom you need to add an AoE
- Click on the Commitments tab
- Click Add Commitment
This will open a modal box in which you can insert the AoE's details
- Fill in the AoE details, including reference, date of issue, amount and type
- If payments have already been made, insert the amount paid before creation
- Select the rate and any custom settings (depending on the type of AoE)
- Fill in the Protected Earnings, whether in Pound (£) or percentage (%)
- Toggle whether to deduct a £1 administration fee
- Click Save Attachment of Earnings
Note: Reference Number is usually defaulted to the employees NI number but ensure to check the documentation carefully to ensure it will be paid over to the correct account.
AoE Deductions in Payslips
There's no further action you are required to take!
After having added the Attachment of Earnings in the employee profiles, Buddy will automatically calculate these when you save payslips.
Once the items are calculated, you can hover over the calculator icon to preview the calculations and understand how the amounts were calculated
Viewing Remaining Balances
Within the Commitments page, you'll always be able to see and edit the Attachment of Earnings data and their remaining balances.
You can also click the Full Report button to download a breakdown of any payments made to-date.
Types of AoE in Buddy
DEA- Direct Earnings Attachments - Under a DEA, the debtor's employer is instructed to deduct a percentage of the debtor's earnings directly from their wages or salary and send it to the creditor.
CMG- Child Maintenance Group - This refers to the department or entity responsible for administering child maintenance payments, which is part of the UK Department for Work and Pensions (DWP).
AEO- Attachment of Earnings Order- Commonly used in civil cases involving unpaid debts, such as unpaid fines or maintenance payments. The amount deducted is based on the debtor's earnings and is subject to statutory limits.
CTAEO- Certified Attachment of Earnings Order (CTAEO) is a specific type of Attachment of Earnings Order in the UK, used when the debtor's earnings exceed a certain threshold. It is typically applied in cases where the debtor has failed to pay a debt, and the court has certified the order, allowing the creditor to take direct action through deductions from the debtor's wages or salary.
The key difference between a standard AEO and a CTAEO is that a CTAEO does not require the debtor to be informed in advance about the deduction, making it a quicker and more enforceable method of recovering debts. It is often used for cases involving unpaid court fines or other debts where the debtor's financial situation is clear.
EA- Earnings Arrestments (EAs) are a legal procedure used in Scotland to recover unpaid debts.
CMA- Child Maintenance Arrangement - This typically refers to the payment plan or agreement set up for child maintenance, either voluntary or enforced via a court or CMS order.
What are your Payroll responsibilities with a AoE?
You must action and setup any orders correctly as applicable and any cancelations or amendments.
That said, it is the employers' responsibility to ensure that the order is passed to Payroll and that payments are passed to the relevant provider.
However, payroll providers have a duty of care in the profession to assist employers or make the payment/s on their behalf if applicable.