Working for an outside employer while still in prison

Aim of this page

This page aims to summarise the Prisoners’ Earnings Act 1996 (PEA) which is detailed in Prison Service Instruction (PSI) 76/2011. It has been written for people in prison who are currently undertaking paid work in the community, and for those who may be doing so in the future.

It also sets out the process of deductions that will be made by HMPPS on behalf of the Prison Governor, which will then be paid to Victim Support.

It’s part of our information on leaving prison.

Why is this important?

If you’re already undertaking paid work whilst in prison or aim to do so at some time in the future, then it’s important to understand how much levy will be taken from your wages.

We have developed a Victims Levy Calculator which will help you to establish how much of your earnings will be deducted by the prison and paid to Victim Support.

Background

This Prisoners Earnings Act (PEA) 1996 gave Prison Governors the power, in certain circumstances, to impose a levy on the earnings of those working for an outside employer whilst they are in prison.

The PEA came into force on 26th September 2011 and means that providing you are earning more than £20 net per week (“net” means after you’ve 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.

Who does this apply to?

The PEA applies to all people in prison who are undertaking paid work in the community. In practice, it generally only applies to those in open prisons but may be applicable to anybody held in closed prisons who are working for outside employers on a regular basis and who earn over the relevant amounts.

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

What would be considered as ‘exceptional circumstances’?

Governors will deal with each application on a case by case basis but ‘exceptional circumstances’ could include:

  • Financial hardship – You would need to show that the imposition of the levy at the rate it is being imposed would lead to you or your family suffering severe financial hardship.
  • Travel costs – For example if the cost of travelling to work is substantial in proportion to your earnings.

Working out the 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 31st March 2017.

How is the money deducted?

Although your employer will provide you with a payslip, you will not be paid directly by them. Your net pay will be paid into a central bank account so that the Shared Services Centre (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 will need to ensure that you have an outside bank account set up. If you don’t already have a bank account, your prison should be able to assist you in opening one as many prisons have arrangements in place with local banks.

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 pro-forma to complete to provide this information. Make sure that you give the prison the correct details as any mistakes may cause delays in you receiving 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 own 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 ensure that you will receive your pay as usual. Otherwise, your pay may continue to be paid into the central prison account.

Discuss this with others

Read and share your experiences on our online forum.

Key sections include:

Useful links

Below you will find links to useful websites relating to this page. More specific details (including addresses and telephone numbers) of some of the organisations listed below can be found here.

  • HMPPS – Responsible for running prisons and probation services in England and Wales

More information

  1. For practical information – More information on leaving prison
  2. To read personal stories – You can read stories about this posted on theRecord, our online magazine
  3. To discuss this issue with others – Read and share your experiences on our online forum
  4. Questions – If you have any questions about this, you can contact our helpline.

Get involved

Help us to add value to this information. You can:

  1. Send your feedback directly to us
  2. Discuss your views and experiences with others on our online forum
  3. Share your personal story by contributing to our online magazine, theRecord.
This page is for information only. We are unable to provide advice on this. Comments below have been disabled and will not be published. For reasons why, click here.
This page was last reviewed in August 2017. If you’ve spotted something that needs updating please let us know by emailing the details to feedback.unlock@outlook.com.
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