New law pre­vents to­tal gar­nish­ment

The Citizen (KZN) - - PERSONAL FINANCE -

Em­ploy­ees whose in­come is gar­nished to pay out­stand­ing debts can breathe eas­ier thanks to new leg­is­la­tion. On July 31, the president signed into law the Courts of Law Amend­ment Act No. 7 of 2017.

The re­sult of a Con­sti­tu­tional Court rul­ing, the amend­ments of­fer greater pro­tec­tion to in­debted per­sons against emol­u­ment at­tach­ment or­ders, the is­su­ing and man­age­ment of which have been poorly reg­u­lated in the past.

An emol­u­ment at­tach­ment or- der (EAO) is an or­der is­sued by a cred­i­tor on an in­debted per­son’s em­ployer, known as a gar­nishee. It com­pels them to deduct a spec­i­fied amount from the worker’s in­come to pay the cred­i­tor.

Pre­vi­ously, EAOs were au­tho­rised by the clerk of the court and could be eas­ily ob­tained from al­most any court, re­gard­less of where the em­ployee works or re­sides, and their abil­ity to be present to de­fend them­selves.

Of great­est sig­nif­i­cance is that the new law im­poses a limit on the amount that may be de­ducted, which can be no more than 25% of a worker’s salary or wages, re­gard­less of the num­ber of ac­tive EAOs against them. The limit ap­plies to ba­sic in­come and ex­cludes ad­di­tional re­mu­ner­a­tion for over­time or other al­lowances.

EOA au­tho­ri­sa­tion must be given by a mag­is­trate. There’s a clause pro­hibit­ing any­one from re­quir­ing a credit ap­pli­cant to con­sent to a judg­ment.

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