CSLM18025 | SL repayments: order of deduction: rounding down

Before 6 April 2002 an issue sometimes arose when applying an order of deduction. To rectify this the regulations were changed so that as from 6 April 2002, the net amount of any Student and or Postgraduate Loan deduction, after restriction by reference to priority court orders, must also be rounded down to the nearest pound.

The example below assumes that the

• Annual threshold is £17,495

• Rate is 9 per cent

• Monthly salary is £2075

• Protected earnings level is £850

And the

• Net attachable earnings after priority orders applied is £903

Example

Step 1

• Monthly salary = 2075

• Deduct monthly threshold of 1457

• Excess above threshold = 618

• Multiply 618 by 9 per cent = £55.62 (rounded down to £55)

Step 2

• Net attachable earnings after priority order applied = 903

• Protected earnings level = 850

• Scope for Student Loan deduction = 53

• Deduct lesser of £55 and £53 = 53 (rounded down to £53.00)