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HMRC internal manual

Collection of Student Loans Manual

From
HM Revenue & Customs
Updated
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SL repayments: order of deduction: order of deduction - except Scotland

Priority Orders based on percentage deductions

In cases such as Council Tax, Community Charge or Income Support Deduction Notices wherethe priority order is based on percentage deductions

  • No Student Loan deductions are to be made until the Attachment of Earnings Order (AEO) or Deduction of Earnings Order (DEO) has been fully paid off

The date of the order can be ignored.

The protected earnings level will not be relevant in this scenario.

Priority Orders based on specified amounts

  • If there is no specified level of protected earnings

The Priority Order should be applied against the borrower’s attachable earnings before the Student Loan deductions are made, although both can be deducted during the same pay period.

The employer should

* Apply the priority orders to the employee’s attachable earnings in the normal way
* Calculate the Student Loan deductions by reference to the Student Loan Deduction tables
  • If there is a specified level of protected earnings

The Priority Order should be applied against the borrower’s attachable earnings before the Student Loan deductions are made, although both can be deducted during the same pay period.

The combined deductions of Court Orders and Student Loan deductions must not reduce the available income below the level of protected earnings. This has the affect that in certain cases, on a particular pay day

* No Student Loan deductions can be made because the Court Order deductions reduce the attachable earnings to, or below, the level of protected earnings

Or

* Student Loan deductions must be restricted because they exceed the balance between the net attachable earnings, (after the deduction of Court Orders) and the protected level of earnings

A working sheet is provided to help calculate the correct deductions in this type of case.

Non - priority Orders

 
Student Loan deductions should be deducted before non – priorityCourt Orders.

The date of the order can be ignored.

The protected level of earnings will not be relevant in this scenario.

The employer should, therefore

  • Use the Student Loan Deduction Tables in the normal way