DMBM667560 - Enforcement action: county court proceedings: attachment of earnings orders (AEOs): deciding whether to apply for an AEO

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Considerations

Before applying for an AEO, you need to consider a number of factors:

  • the judgment debtor must be in default under the judgment or order (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • the judgment debtor must be in receipt of income subject to PAYE (check NPS if you are unsure). Usually this will be where the judgment debtor is in PAYE employment but it can also be where the judgment debtor is in receipt of an occupational pension. There is a possibility that the judgment debtor will leave PAYE employment if you obtain an AEO, but the AEO can be transferred to another employer although the process can be slow and cumbersome
  • the employer must be resident (or have a place of business) in England or Wales
  • the judgment debtor’s earnings from a single employment are likely to be sufficient. An AEO can operate against only one employer at a time. If the judgment debtor has more than one employment you should ensure that an AEO will operate successfully against the employer that you nominate. You should normally nominate the employer paying the higher (regular) salary.
  • whether any other AEOs are already in force.

Where the credit data check reveals that there is already one or more CCJs registered against the judgment debtor, you should apply on form N336 to the court manager (for the district in which the judgment debtor lives) for a search of the ‘Attachment of Earnings Order Index’.

The court will return form N336 showing whether or not an AEO is already in force and, if so, whether it is priority or non-priority.

Calculating the protected earnings

In all cases where you are considering applying for an AEO you should calculate the likely protected earnings rate. There is little to be gained in applying for an AEO where either the judgment debtor’s earnings are less than the protected earnings rate, or the ratio of protected earnings to attachable earnings is high.

You should use the scales in charts CCP100 and CCP200 to help you calculate the protected earnings rate.

When fixing the protected earnings rate, the court will consider the amount that the judgment debtor would receive in state benefits if unemployed. The court will base its calculations on income-related sources, for example Income Support and Tax Credits (though the latter is not strictly a benefit).

You should estimate the weekly/monthly protected earnings rate in a similar way:

  • take the appropriate personal allowances amount from the scale of ‘personal allowances’ (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • add any ‘premium payments’ (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • add the amount payable weekly/monthly in respect of:
  • rent/mortgage
  • council tax
  • insurance premiums
  • court orders (but do not count any existing court order in respect of the case you are taking the AEO for)
  • water rates
  • travelling expenses
  • any other essential expenses (but remember that the ‘personal allowances’ and ‘premium payments’ include an allowance for normal living expenses such as food, clothing, heating and so on)
  • deduct income from sources other than his/her employment, that is:
  • state benefits (child benefit, family credit, disability pension and so on)
  • spouse’s earnings
  • payments from a working son or daughter
  • rent received.

You should ignore the first £5 (weekly) or £21.67 (monthly) of any disability pension and of the spouse’s earnings.

Note: In many cases the judgment debtor will have supplied figures that are a combination of weekly, monthly, quarterly or annual payments. It is vital that you convert these amounts to the same frequency as the defendant is paid.

If the judgment debtor is paid monthly all figures should be converted to monthly to provide accurate figures. To convert weekly figures to monthly you should multiply by 4.33, not 4.

Example of a calculation (monthly figures)

The judgment debtor is a married man living with his wife and two children. Their son is aged 14 (dependent) and their daughter is working (not dependent).

- Income Expenditure 

Personal allowances

-

-

-

£487.72

-

-

£284.35

£772.07

-

-

-

Mortgage

-

£250.00

Council Tax

-

£90.00

Insurance

-

£25.00

-

-

£1,137.07

Wife’s earnings (less £5/£21.67)

£328.37

-

Child benefit

£87.97

-

Payment from daughter

£150.00

£566.34

Protected earnings

-

£570.73