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When calculating protected earnings for Court Order purposes, if the employee has agreed to a Salary Sacrifice scheme for example Child Care Vouchers, is the protected earnings calulated before or after the deduction of the sacrificed pay?

My own feelings is that as the Salary Sacrifice scheme is contractual, the protected earnings are calculated after deduction of e.g. Child Care Vouchers but I would like to see some legislation.

Would appreciate your comments.

Section 6 of the Attachment of Earnings Act 1971 requires employers to apply a court order by making "periodical deductions from the debtor’s earnings".

The Act, in section 24, defines "earnings" for this this purpose, usually called "attachable earnings", as "any sums payable to a person by way of wages or salary (including any fees, bonus, commission, overtime pay or other emoluments payable in addition to wages or salary or payable under a contract of service), after the deduction of tax and NICs. There are some other kinds of payments that are included and excluded, but they are not relevant to this discussion, except to say that "earnings" do not include the value of any benefits in kind provided. In most cases, therefore, an employee's net pay is the attachable earnings.

Therefore, your own conclusion is correct. The effect of a salary sacrifice scheme is to change contractually some of an employee's wage or salary into a benefit in kind. Only the new reduced wage or salary is included in the employee's "earnings" for court order purposes.

More detailed information is available in the Attachment of Earnings guide published by HM Courts Service, in Appendix A. The document is available at http://www.hmcourts-service.gov.uk/docs/a_e_handbook.pdf.