Working out whilst in prison – Victims Levy

This is for information only.  We are unable to provide advice on this.  For reasons why, click here.

Introduction

This document summarises the Prisoners’ Earnings Act 1996 (PEA) as detailed in Prison Service Instruction (PSI) 76/2011, which is available to download here.

This has been written for people in prison who are currently undertaking paid work in the community, and for those who may well be in the future. It sets out the process of deductions that will be made by NOMS on behalf of the Governor, which will then be paid to Victim Support. It also helps people understand how much levy will be taken from a specific wage.

Alongside this document, we have developed a Victims Levy Calculator. This tool helps you to establish how much of your earnings will be deducted by the Prison and paid to Victim Support if you are in prison and working out in the community.

Summary of changes

  • The Government is implementing the Prisoners’ Earnings Act 1996
  • The terms of the Act came into force in September 2011
  • Since this date, wages paid from external employers will no longer be paid to you directly – they will be paid to NOMS Shared Service Centre (SSC)
  • If you are undertaking paid work in the community you will be able to earn £20 per week without any deduction
  • For any “net” earnings (i.e. after tax, national insurance, court-ordered and child support payments) above £20 per week, SSC will deduct 40% of your wages. The remaining amount will then be credited to your bank account
  • The amount deducted will be paid to Victim Support.

Background

This Act gives the Governor a power to impose a levy on your earnings in certain circumstances. This means that if you are working outside the prison on licence you will be subject to the levy.

The levy amounts to 40% of all earnings on your “net” pay, aside from £20 per week which will not be subject to the levy.

Who does this apply to?

The PEA applies to all people in prison who are undertaking paid work in the community.

It is expected that, in practice, it will apply only people in open prisons. However, it still applies to those people held in closed prisons who are working out for outside employers on a regular basis and who earn over the relevant amounts.

When are the changes happening?

The PEA was brought into force on 26th September 2011.

Providing that you earn more than £20 net per week (“net” means after you have paid any tax, national insurance contributions, court-ordered and child support payments that may be due), any earnings over £20 will be subject to a levy of 40%.

The levy will be paid to Victim Support, a national charity which works in partnership with numerous other such groups, with a view to supporting victims and communities.

Amount of deduction

To work out how much of your wage will be deducted and paid as a Victims Levy, use the Victims Levy Calculator that we have produced.

To illustrate the potential level of deductions, you will find below examples of how this will affect people on different wages. Examples correct as at the 1st October 2011.

victimslevy

However, as the Act states that the Governor may impose a levy, it is open to Governors to decide not to do so in a particular case where there are very exceptional circumstances, or to reduce the amount deducted. You should speak to the Governor in your prison about the process for getting them to consider any exceptional circumstances you may have.

What does this mean for me?

You will no longer be paid directly by your employer. They will still provide you with a payslip, but your net pay will be paid first into a central bank account so that the SSC can administer the levy on behalf of the Governor. This will be the case even if you earn less than £20 per week “net”.

The SSC will then make a deduction of 40% on any “net” pay above £20 per week, and the remaining balance will be transferred to your outside bank account. The process may take up to 5 days, so you should expect a delay. However, if you are paid by cheque this may mean you could experience a longer delay as the cheque will require clearing before being processed.

The prison will provide you with a monthly statement; which will show you what your net pay was from your employer, how much was taken off by way of the levy, and how much will be transferred into your outside bank account.

To work out how much of your wage will be deducted and paid as a Victims Levy, you can use our Victims Levy Calculator.

What do I need to do?

You need to make sure that you have an outside bank account set up. If you don’t, you need to arrange to set one up. Your prison should be able to assist you in doing this.

Once you have a bank account, you will then need to provide the prison with the following details:

  • Name of Bank
  • Name of Account Holder (usually your name)
  • Account Number
  • Sort Code Number

The prison should provide you with a proforma to complete to provide this information. You need to make sure that you give the prison the correct details as any mistakes could delay when you receive your pay.

If you refuse to provide your outside bank details or refuse to set up an outside bank account, you will no longer be allowed to work outside in paid employment. The SSC can pay the money into someone else’s bank account if you ask them to do so, but this is at your risk.

The prison should have provided your employer with your date of release. However, it’s important that you make them aware of the date and give them your personal bank account details nearer the time. This will make sure that you will receive your pay as usual. Otherwise, your pay may continue to be paid into the central prison account.

For more information

The full Prison Service Instruction is available to download here.

The Victims Levy Calculator we have created is available here.