Priority of deductions

Some clients have existing deductions being paid from their benefit (e.g. Child Support or Ministry debt repayments). The emergency housing contribution and any emergency housing debts are included as deductions under 'Ministry debt repayments'.

Some types of deductions take priority over others. If the client has more than one order issued on their benefit, you will need to determine the priority of deductions.

The following list gives the order of priority, from highest to lowest:

• Child Support deductions made under the Child Support Act 1991
• Inland Revenue tax deductions
• MSD debt repayments including the emergency housing contribution and emergency housing contribution debt
• Attachment orders made under the Family Proceedings Act 1980
• Court attachment orders issued under the Summary Proceedings Act 1957
• Court attachment orders issued under the District Court Act 2016
• Student Loan repayments

When MSD needs to reduce deductions, they are adjusted from the lowest priority up to those with a higher priority.

MSD needs to consider the protected earnings rules for each order or deduction notice.

Some clients may have deductions from their benefit that are a higher priority than the emergency housing contribution. These clients will still pay the full amount of the emergency housing contribution.

However, MSD may need to recover the contribution in instalments over a longer number of paydays. This is so the contribution does not reduce a client's protected earnings.

Example

A client has a child support deducation and an emergency housing contribution to be paid from their benefit. Because of the order of priority, the child support deductions takes priority over the emergency housing contribution.

When the amount of emergency housing contribution would reduce the client's benefit payment below the protected earnings rate, the emergency housing contribution must be recovered in instalments over a longer number of pay days.