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Attachment of Income Order Scheme - Notes for Maintenance Payees

Introduction

If you are a maintenance payee, you may, in the event of a default in maintenance payment by the maintenance payer ("payer") without reasonable excuse, apply to the court for an order to attach the income (i.e. to deduct his income and pay the money deducted to you) of the payer to recover the arrears of maintenance and future maintenance payments.

The purpose of this booklet is to explain to you in simple terms the "Attachment of Income Orders", a measure through which maintenance payments can be collected. Though in this booklet we strive to give a precise explanation of the relevant laws and court procedures, the booklet itself has no legal effect. Should you have any queries, you should consult your solicitor or seek free legal advice from the Free Legal Advice Service of the Duty Lawyer Scheme.

Although you may apply for an AIO without instructing a solicitor, the professional knowledge and experience of a solicitor may help you to promptly and accurately go through the required procedures and present relevant facts for consideration by the court.

In case you are in financial difficulties and cannot afford to instruct a solicitor, you may apply for legal aid at the Legal Aid Department. They will appoint a solicitor to act for you in the court proceedings concerning the application, provided you pass the means and merit tests.

If you encounter financial difficulties following a default in maintenance payment, you may apply to the Social Welfare Department for Comprehensive Social Security Assistance (CSSA). They will offer you assistance to alleviate your financial difficulty, provided that you are eligible for receiving CSSA.

Should you need any legal assistance, legal advice and CSSA, you may contact the following departments and organization for enquiries:

Legal Aid Department

Address : 24/F Queensway Government Offices, 66 Queensway, Hong Kong
Telephone No. : 2537 7677

Social Welfare Department Address : 7-9/F Wu Chung House, 213 Queen's Road East, Wan Chai
Departmental Hotline : 2343 2255

Free Legal Advice Service of the Duty Lawyer Scheme
Appointment can be made at the District Offices
Telephone No.: 2526 5969

What is an Attachment of Income Order?

An "Attachment of Income Order" ( "AIO" ) can be made by the court under the Guardianship of Minors Ordinance (Cap 13), the Separation and Maintenance Orders Ordinance (Cap 16) and the Matrimonial Proceedings and Property Ordinance (Cap 192).

An AIO will enable you to receive the maintenance payment direct from the income source of the payer without contacting the maintenance payer. The "income source" of a payer (such as employer, tenants, etc.) shall deduct from the payer's income the amount specified in the AIO when each payment of income is due and pay the amount to you direct.

The amount to be attached, period of attachment and payment method are specified in an AIO. The amount to be attached is not confined to arrears of maintenance payment, but may also include future maintenance payments. Moreover, there are no legal restrictions on the payment methods. You may, according to your need, request the court to order the income source to pay by bank transfer, cheque, cash or other methods of payment.

In what circumstances will the court issue an AIO?

The law provides that the court may issue an AIO where :

  1. the payer has failed, without reasonable excuse, to make any payment in compliance with a maintenance order; AND

  2. the payer has any income capable of be ("attachable income").

In order to determine whether the payer defaults "without reasonable excuse", the court has to consider the reason for his default. Generally speaking, you may assume that a payer defaults "without reasonable excuse" if you believe that he is able to pay but gives no explanation for his non-compliance with the maintenance order. The court has to consider the evidence given by the payer and you, and where necessary , the evidence provided by other people (such as the payer's employer), before it can decide whether the payer has failed, "without reasonable excuse", to make the payments.

The word "income" is very broad in meaning. Apart from salary and wages, it may also include rental receipts, company dividends, directors' emoluments and various kinds of income. Therefore, "income source" includes people like the employer and tenants of the payer, as well as companies of which the payer is a shareholder or a director.

"Attachable income" has not been defined in law. Generally speaking, an "attachable income" should have an identifiable income source, e.g. a person, company or institution. Otherwise, the court will be unable issue an AIO.

For example, if the payer is self-employed (such as being a hawker, a taxi driver, etc.), then his customers/passengers are his "income source". However, since he cannot foretell who his customers/passengers will be, it is impossible for the court to issue AIOs to these customers/passengers. Therefore, the income from the sale of goods and fares by the passengers is not "an attachable income". In these circumstances, you should consult your solicitor to see if it is possible to collect the maintenance by other means.

If the payer is a property owner, the rental receipts may be treated as "attachable income" and the court may issue an AIO to the tenant. If the payer is a shareholder, then the dividends from the company may be treated as "attachable income" and the court may issue an AIO to the company. If the payer is a director of the company then the court may treat his emoluments as "attachable income" and the court may issue an AIO to the company.

You may apply for an AIO even though you are not sure whether or not the payer has an "attachable income", because the payer is obliged to declare his "income" and "income source" after you have made an application, and the court may decide, based on the facts, whether or not he has an "attachable income".

How to apply for an AIO ?

Application

Your application for an AIO must be made by a summons or originating summons to the Court of First Instance of the High Court or the District Court note1. You must also submit an affidavitnote 1 to the court to provide the following information:

  1. your name and correspondence address;

  2. the name and the last known address note 2 of the payer;

  3. particulars of the maintenance order;

  4. the case number of the previous proceedings under which the maintenance order was made;

  5. the date of service of the maintenance order, and in the case of its not having been served, the reason for its non-service;

  6. that the payer has defaulted in payment and that , to your honest belief, there is no reasonable excuse for the default;

  7. particulars of the default, including the amount of default and the arrears accrued at the date of the affidavit;

  8. the case number of any judgment summons already issued and particulars of any other execution proceedings already instituted to enforce the maintenance order; and

  9. the name and address of the income source and the nature of the income.

If you do not know who the income source of the payer is, simply say so in the affidavit. This will not affect the validity of your application for AIO. The payer has to forward to the court and to you a copy of "statement of means" in which details of all his income and income sources are set out regardless of whether you have mentioned them in the affidavit. The court will fix a date for hearing upon receipt of your application.

Service of documents

When you apply for an AIO, you should file the summons (or originating summons) and the affidavit, together with two copies of the summons (or originating summons) to the court (either the Court of First Instance of the High Court or the District Court as the case may be). Staff of the court will deal with your application and affix the seal of the court to every copy ("sealed copy") of the summons (or originating summons) so that you can serve them on the payer and keep one sealed copy yourself.

You (or your legal representative) should serve the sealed copy of the summons, a copy of affidavit(s) and a form of statement of means on the payer (or his legal representatives) by one of the following means:

  1. serving the documents on the payer personally note3 ; or

  2. sending the documents to the last known address of the payer by post or registered post.

Under the law, where the documents are served on the payer by means of (b), the documents shall be deemed to have been served on the seventh day after the documents were sent.

Statement of means

The payer must forward to the court and you a copy of "statement of means" in which details of all his income and income sources are set out within 14 days of the service of the application documents. The court will send the statement of means to the relevant income sources and order them to verify the contents of the statement.

If you do not receive the statement of means from the payer 14 days after the date of service of the application for an AIO, you can file an ex parte applicationnote1 to the court, requesting the court to order the payer to submit the statement. After such an order is made by the court, you should also serve the order on the payer by the methods set out in paragraph 20. The payer is required to submit the statement of means to you and the court within seven days of the date of the order.

Statement of verification

The income source shall verify the information contained in the statement of means and send a "statement of verification" to the court within 14 days of the date of the order. The court will send you and the payer a copy of the statement.

Hearing of an AIO application and the issue of an AIO

Both you and the payer must appear at the hearing of the AIO application, during which you must submit to the court the reasons in support of your application and all the relevant information (e.g. the method of payment, the period of attachment, etc). The payer will be entitled to make representations in response to the points raised by you. If the income source considers it necessary to make known to the court any issues that are neither mentioned in the statement of means nor in the statement of verification, he may also seek permission from the court to attend the hearing.

The court will take into account the information submitted by all parties in order to decide whether the payer has failed to make payment without reasonable excuse, whether his income is attachable and whether an AIO should be issued. The court will also decide on the amount to be attached, the method of payment and the effective period of an AIO.

Where an AIO has been made, you must serve the relevant documents on both the payer and the income source(s) concerned either personally (see note 3) or by registered post. The order shall take effect on the commencement date specified in the order or 14 days after the date of service, whichever is the later.

Are there any circumstances in which you still cannot collect payment even after an AIO has been made?

The purpose of making an AIO is to provide you with a reliable means of collecting maintenance payments. In normal circumstances, an income source shall comply with the order and pay to you the amount as specified in the AIO. However, at some later stage, an income source may not be able to pay the specified amount in full in the following circumstances:

  1. when the income of the payer has dropped to such a level that it is insufficient to cover the specified amount; or

  2. when the income source is the payer's employer who, according to section 32 of the Employment Ordinance (Cap 52), is allowed to make deductions from the payer's wages (such as recovering the cost of meals or accommodation provided for the employee) and the balance after reduction is insufficient to pay the specified amount.

In the case of (a), the income source shall pay the reduced income in full to you. For example, the income of a payer is $8,000 while the amount to be attached as specified in an AIO is $4,500. If the income of the payer later drops to $4,000, the income source shall deduct the reduced income, i.e. $4,000, in full and pay it to you.

In the case of (b), the income source (the payer's employer) shall pay to you the balance of the payer's wages in full after making the deduction so authorized under the Employment Ordinance. For example, the income of a payer is $8,000, while the amount to be attached as specified in an AIO is $4,500, and the amount the payer's employer may deduct under the Employment Ordinance is $4,000. Then, the income source may first deduct the $4,000 he is entitled to and pay the remaining sum of $4,000 in full to you. By doing so, he will be regarded to have complied with the AIO.

In the case of either (a) or (b), the income source shall inform you and the payer of the reasons why he fails to pay the full amount specified in the AIO and of the actual amount that has been paid to you.

If an income source ceases to be an income source of the payer during the effective period of the AIO because of the resignation dismissal or redundancy of the payer, the expiry of the tenancy or any other reasons, he shall inform the court and you within seven days of such changes, whereupon the court may discharge the AIO. Thereafter the income source will no longer be required to pay the specified amount to you.

In the circumstances mentioned in paras 28 to 32 above, the payer shall remain liable to pay the outstanding balance to you. You may also apply to the court for collecting the outstanding balance through another AIO (if the payer has other income sources, or obtains a new employment) or other means.

What if the attachable income of a payer is less than the maintenance payable under a maintenance order?

If the attachable income of a payer is less than the total amount specified in a maintenance order, the payer shall pay to you direct the balance. Moreover, under the law, the payer shall notify you in writing of any increase of his income or any new income source such as pay rise or income from a part-time job, within seven days of such changes. You may apply to the court for another AIO in respect of the increase in the payer's income or the new income source.

How to vary or discharge an AIO?

The Court may, upon application either by you or the payer, vary an attachment order. The payer may apply to reduce the payment because he is earning less or for some other reason. In the following circumstances, the court may consider making an order to discharge an attachment order:

  1. upon the application by you or the payer;

  2. upon receipt of notification to the effect that an income source ceases to be an income source of the payer;

  3. upon the discharge or lapse of the related maintenance order; or

  4. when another attachment order is made.

An application for the variation or discharge of an attachment order shall be made by way of a summons and filing of an affidavit stating:

  1. your name and correspondence address;

  2. the name and last known address of the payer (see note 2);

  3. particulars of the maintenance order;

  4. the case number of the previous proceedings under which the maintenance order was made;

  5. the case number of any judgment summons already issued and particulars of any other execution proceedings already instituted to enforce the maintenance order;

  6. the case number of the attachment order which the application seeks to vary or discharge; and

  7. the grounds for the application.

What should you do if the payer and income source fail to cooperate ?

A payer or an income source commits an offence and is liable to a fine if he fails, without reasonable excuse, to comply with an order of the court, or provides false information to the court. A payer is also liable to imprisonment if an offence is committed.


note 1

What are "summons" or "originating summons"? How to file an ex parte application? Should you apply to the "Court of First Instance of the High Court" or the "District Court" ? What are the procedures for making an "affidavit" ? The above questions are too technical to be explained clearly in simple terms. If you intend to apply for an AIO by yourself instead of instructing a solicitor, you may seek legal advice by making an appointment at any District Office with a duty lawyer through the Free Legal Advice Service of the Duty Lawyer Scheme. For details of this Service, please call the enquiries hotline: 2526 5969.

note 2

It is stipulated in law that the payer must inform you of his new address by registered post to your correspondence address within 14 days of change of address.

note 3

It does not mean that you or your solicitor must serve the documents personally. You may appoint a third party (for example, staff of the solicitor ,or through courier service) to deliver the documents to the payer (or his legal representative) direct.


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