PART 4Deduction of Repayments by Employers

Priority where other deductions required51.

(1)

Where any employer is required to deduct repayments from a payment under regulation 50 but the aggregate of the deduction and any deductions on account of income tax and National Insurance contributions exceeds the amount of the payment, the employer must make the deductions on account of income tax and National Insurance first and the amount of the repayment which is to be deducted must be the remaining balance.

(2)

Where an employer is required to deduct repayments from a payment under regulation 50 and is also required to comply with one or more of any of the types of notice or order in paragraph (3), paragraph (4) will apply.

(3)

For the purposes of this paragraph, the notices and orders are—

(a)

attachment of earnings orders made under the Attachment of Earnings Act 1971 (“the 1971 Act”)42, the Community Charge (Administration and Enforcement) Regulations 198943 (“the Community Charge Regulations”), the Council Tax (Administration and Enforcement) Regulations 199244 (“the Council Tax Regulations”), the Judgments Enforcement (Northern Ireland) Order 198145, the Magistrates’ Courts Order 198146;

(b)

deductions of earnings orders made under the Child Support (Collection and Enforcement) Regulations 199247; or

(c)

income support deduction notices made under regulation 20 of the Social Security (Payments on Account, Overpayments and Recovery) Regulations 198848 (“the Social Security Regulations”).

(4)

An employer must deduct repayments as if they were amounts requiring deduction pursuant to an order under the 1971 Act which—

(a)

was not made to secure the repayment of a judgement debt or payments under an administration order;

(b)

was the most recent order under that Act not made for that purpose; and

(c)

specifies a protected earnings rate equal to the protected earnings rate specified in the most recent attachment of earnings order, deduction of earnings order or income support deduction notice not made for that purpose which specifies such a rate, unless there is no such order or notice.

(5)

Where in the circumstances described in paragraph (4) an employer is required to comply with an attachment of earnings order made under the Community Charge Regulations, the Council Tax Regulations or an income support deduction notice under regulation 20 of the Social Security Regulations before deducting a repayment under regulation 50, no repayment must be deducted by the employer.

(6)

Where an employer is required to deduct repayments from a payment under regulation 50 and is also required to comply with one or more earnings arrestments, current maintenance arrestments or conjoined arrestment orders within the meaning of the Debtors (Scotland) Act 198749 (whether or not also required to comply with an attachment of earnings order, deduction of earnings order or income support deduction notice), no repayments under regulation 50 may be deducted.

(7)

Where repayments to be deducted in accordance with paragraph (4) are reduced as a result of paragraph 4(c) and the total of the reduced payments includes pence as well as pounds the pence are to be ignored.