NEC ECS: Can Liquidated Damages be taken from Retention?

Following an error, the only amount due to a Subcontractor is their retained 5%. They are due to pay liquidated damages as they were late against 2 sectional completion dates.

Can the liquidated damages amount be deducted from the retention? So on the Payment Certificate, release 2.5% to them but then deduct the DD’s from that?

Yes, that is what the retention is for.