Schedule 2 of the Debtors (Scotland) Act 1987 contains the necessary tables that enable employers and software to calculate the value that must be deducted when a Scottish Arrestment is applied. This process is known as enforcement by Diligence and there are three regimes that employers have to be aware of:
The Earnings Arrestment (EA)
The EA is used by the Scottish Sherriff to recover civil debts and fines plus outstanding Council Tax. The deduction to be made from pay is calculated according to a set of tables that recover a percentage of the debt according to the level of earnings in the pay period.
The Current Maintenance Arrestment (CMA)
The CMA is used to enforce any ongoing maintenance obligation. The deduction to be made is a daily rate, specified by the Sherriff, and multiplied by the number of calendar days in the pay period. Therefore, someone paid weekly will have a daily rate multiplied by 7, though someone paid monthly will have a varying deduction depending on the month of the year.
The Conjoined Arrestment Order (CAO)
If multiple Diligence enforcements are in place, individual enforcements are withdrawn and reissued as a CAO – i.e. amalgamating the debts. The deduction made is the same as the CMA, with a daily rate multiplied by the number of calendar days in the pay period.
From 06 April 2019
The necessary tables required for the operation of Scottish Arrestments are, typically, reviewed every three years. When reviewed in 2015 (effective April 2016), they were increased by the rate of inflation rather than the rate of earnings. The review in 2018, effective 06 April 2019, uprates the figures in line increases in average earnings.
The Protected Minimum Balance
To ensure that the individual has earnings protection against hardship, the concept of Protected Earnings also applies in Scotland, however, this is known as the Protected Minimum Balance (PMB). This was introduced to Arrestments by the Bankruptcy and Diligence etc. (Scotland) Act 2007.
The lower monthly threshold for Earnings Arrestments determines the PMB and this increases from £494.01 to £529.90 monthly. The weekly and daily PMBs are derived from this monthly value. For Current Maintenance Arrestments and Conjoined Arrestment Orders, the daily PMB increases by £1.18 per day from £16.24 to £17.42.
Consequently, the following tables will apply:
Table A: Deductions from Weekly Earnings
Table B: Deductions from Monthly Earnings
Table C: Deductions from Daily Earnings
(When applying a percentage deduction, the calculation is made to two decimal places of a penny and the result rounded to the nearest whole penny, with an exact half penny being rounded down)
The above changes are reflected in The Diligence against Earnings (Variation) (Scotland) Regulations 2018 which were laid before the Scottish Parliament on 12 November 2018. The Regulations are a ‘negative instrument’ in the Scottish Parliament, which means that they only needed to signed-off by a Minister when they are laid and come into force if they are not ‘annulled’ within 40 days.
The above Scottish Arrestments may apply to employees in any part of the UK if they have enforcements made in Scotland. Therefore, all employers need to be aware of these changes from 06 April 2019.
So, it is a good idea to ensure that any annual software update includes these new values.