Home > Earnings & Deductions > What Counts as Earnings?

What Counts as Earnings?

By: Lorna Elliott LLB (hons), Barrister - Updated: 30 Oct 2017 |
 
Earnings Csa Cms Maintenance Child

The CSA/CMS calculates child maintenance payments on the basis of your income. One of the options for enforcement is taking a deduction from your earnings in order to satisfy your child maintenance payments. A Deduction from Earnings Order (DEO) is a secure method of collection of child maintenance as it is paid directly by the employer of the non-resident parent to the agency, which then passes it on to the resident parent.

How Do DEOs Work?

DEOs work in a very similar way to Attachment of Earnings Orders, which are used to collect debts for things like county court judgments and fines. You should be aware that it is not up to your employer as to whether they should deduct earnings from your pay or not. It is a discretion of the CSA/CMS, and if an employer fails to cooperate with a DEO then they can be prosecuted and may also be required to pay a fine.

What Are My 'Earnings'?

It is sometimes confusing as to what ‘earnings’ actually are for these purposes, and it can leave you wondering how much of the money you receive will be deemed to be your earnings as regards child support payments.

For the purposes of the CSA, earnings are the funds that are taken into account after the deduction of income tax, national insurance contributions and pension contributions. Pension contributions must be regular, and lump sum payments are unlikely to count. If in doubt, you should seek advice on this.

Money That Is Not Classed As Earnings

Money that an individual receives that are not classed as ‘earnings’ include: statutory payments made by an employer for reasons of maternity, paternity, redundancy or adoption pay; tax credits; social security pension, benefit or allowance, any payments made under a disability pension or benefit; or a guarantee payment under social security pensions legislation. If you receive any of these kinds of payments and they are your sole income, your employer cannot use this payment to deduct child support from your earnings.

Money That Is Classed As Earnings

Employers can however deduct money from the following types of earnings: private pensions, occupational pensions; wages; overtime pay; bonuses; commission; or any payments that are made on top of a person’s wages. In addition, it is possible to deduct from an individual’s statutory sick pay. If your employer pays you ‘contractual’ maternity, paternity, redundancy or adoption pay, this is classed as ‘earnings’ and can be subjected to deductions for child maintenance.

Difference Between Contractual And Statutory Pay

The difference between ‘contractual’ and ‘statutory’ in these circumstances is that for contractual pay, the amount that you are paid is determined by your contract with your employer. ‘Statutory’ pay is a minimum amount of money to which you are entitled by law. Contractual pay is therefore higher than statutory pay. If you are receiving contractual pay in these circumstances, the deduction cannot be so high that it eats into your statutory pay.

If you are on statutory maternity, paternity or adoption pay, you may be subject to deductions from your earnings once you choose to return to work. This may be on a voluntary basis, or you may be required to do so.

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X - Your Question:
Been told by CMS that I still have to pay full amount for my two children even though I get only SSP but they will drop payments a bit lower next year. Where can I complain for this as they would basically leave me with 20 quid a week if that.

Our Response:
Please see gov.uk link here, which should tell you all you need to know regarding how to complain. Either parent should tell the Child Maintenance Service or CSA if the paying parent’s income increases or decreases by 25% or more for Child Maintenance Service cases, or 5% or more for CSA cases which began after 3 March 2003.
ChildSupportLaws - 31-Oct-17 @ 2:35 PM
Been told by CMS that I still have to pay full amount for my two children even though I get only SSP but they will drop payments a bit lower next year. Where can I complain for this as they would basically leave me with 20 quid a week if that.
X - 30-Oct-17 @ 11:01 PM
Hi, Can a voluntary redundancy payment be taken into account in child maintenance payments if the payment is over £30,000? Thanks
Dancing queen - 26-Oct-17 @ 3:50 PM
Cath - Your Question:
Hi, I’m a single mum and have two children (10 & 5) with my ex who has paid 3 months - £360 over the last 5 years and manages to buck the system constantly. I received an anonymous message telling me he was winning vast sums of money at pool competitions (he was semi-pro snooker player once) but obviously he denied this. I have recently found out that he is claiming DLA since January so loads of arrears have now been wiped out (he isn’t disabled). Tonight I have found something online that shows that he has recently won £2k at a pool match - which is what he had denied previously - being that his DLA is for a very bad shoulder this makes me so angry. And the fact Is I don’t want his money - it’s the principle of the fact he has basically paid nothing as he doesn’t think he should. He has said previously he is a professional pool player and now I reckon he is - can CMA claim against these winnings? Sorry for such a long question but I’m so angry!

Our Response:
If your ex has paid tax on the earnings, then yes, you would have a claim. However, if he hasn't and has just pocketed the cash without declaring it to HMRC, then you wouldn't be able to.
ChildSupportLaws - 24-Oct-17 @ 12:50 PM
Hi, I’m a single mum and have two children (10 & 5) with my ex who has paid 3 months - £360 over the last 5 years and manages to buck the system constantly. I received an anonymous message telling me he was winning vast sums of money at pool competitions (he was semi-pro snooker player once) but obviously he denied this. I have recently found out that he is claiming DLA since January so loads of arrears have now been wiped out (he isn’t disabled).Tonight I have found something online that shows that he has recently won £2k at a pool match - which is what he had denied previously - being that his DLA is for a very bad shoulder this makes me so angry. And the fact Is I don’t want his money - it’s the principle of the fact he has basically paid nothing as he doesn’t think he should. He has said previously he is a professional pool player and now I reckon he is - can CMA claim against these winnings? Sorry for such a long question but I’m so angry!
Cath - 21-Oct-17 @ 12:00 AM
Lou0927 - Your Question:
I have been waiting for arrears to be paid by my ex husband for approximately 3 years. I have had no maintenance for 5 years. He now has our 17 year old son living at his mothers and is trying to claim for him from my wages! I earn between £600 & £700 per month and have our daughter with me. How can this be right?

Our Response:
Much depends upon whether your ex has been earning for the past five years and the reasons why CMS cannot collect the money (you don't say why). Child maintenance is based upon earnings and any taxable income paid via HMRC. I can't comment on whether this is 'right' or not. Again, much depends upon the situation and your individual case. However, if you have a complain, please see link here .
ChildSupportLaws - 20-Oct-17 @ 10:09 AM
I have been waiting for arrears to be paid by my ex husband for approximately 3 years. I have had no maintenance for 5 years. He now has our 17 year old son living at his mothers and is trying to claim for him from my wages! I earn between £600 & £700 per month and have our daughter with me. How can this be right?
Lou0927 - 19-Oct-17 @ 2:35 PM
@Rs - if the amount is taxable it may be classed as 'earnings' in which case it would be taken into consideration.
WillH - 17-Oct-17 @ 10:10 AM
Cookie - Your Question:
I'm on ssp for 16 weeks do I have to pay full CM

Our Response:
If you are registered to pay through CMS, you would have to contact CMS directly if your salary has dropped, the CMS will advise.
ChildSupportLaws - 16-Oct-17 @ 3:48 PM
I have recently been constructively dismissed from my job and expecting compensation does CMS take this into account of child maintenance as I am out if work
Rs - 16-Oct-17 @ 12:51 AM
I'm on ssp for 16 weeks do I have to pay full CM
Cookie - 15-Oct-17 @ 9:20 PM
Confused- Your Question:
I've had quite a bit of overtime recently. however that has all stop this month. My daughter has now moved to her dad's. How with the cms calculate how much maintenance I have to pay ? I'm down about £80 a month. compared to this time 6 months ago. Thank you

Our Response:
The CMS gets all financial information from HMRC, making sure it is for a complete tax year. So, it would be the last full tax year you worked, i.e April 2016-April 2017.
ChildSupportLaws - 6-Oct-17 @ 1:51 PM
I've had quite a bit of overtime recently.... however that has all stop this month. My daughter has now moved to her dad's. How with the cms calculate how much maintenance I have to pay ? I'm down about £80 a month.... compared to this time 6 months ago. Thank you
Confused - 3-Oct-17 @ 11:25 AM
@Broken - I don't think CMS will do anything if you're off for a short period of time. I'd ring them up and find out.
MooseJ - 19-Sep-17 @ 3:58 PM
Hello I have just started work for a new company and as such do not receive sick leave. I have just broken my foot and can not drive etc so will be on statutory sick pay. Will the CMS change my weekly payment or should I leave my employer as I'm on a weeks notice period?
Broken - 19-Sep-17 @ 7:41 AM
Hello I'm thinking of leaving work and traveling around Asia etc for up to 6 months. I currently pay via CMS calculation directly to the mother. If I have income form rented rooms in my home but keep a room for my personal belongings etc would any room rent be taxable I understand the first £7500 is tax free under the rent a room scheme.
Away - 19-Sep-17 @ 7:37 AM
Dinky - Your Question:
I had to sell my home and give my ex £50,000 does any of this money count towards his money earnt or is it purely earnings as an employee

Our Response:
This would not count as earnings. The only earnings that count in a child maintenance application are earnings which are taxable.
ChildSupportLaws - 8-Sep-17 @ 11:57 AM
I had to sell my home and give my ex £50,000 does any of this money count towards his money earnt or is it purely earnings as an employee
Dinky - 7-Sep-17 @ 4:32 PM
My 'jobs need' car appears on my wage slip as a Notional Payment, this amount doesn't appear in the make up of my salary as I don't receive a penny of it. I pay tax on that Notional amount and I have to pay all my private fuel. Why is this Notional amount added to my salary for the purposes of the CSM calculation? I'm paying money to my ex that I don't actually earn? Why doesn't the CSM do the smart thing and just use Taxable earnings as the basis for their calculations?, thus eliminating grey areas and making it an all round fairer system... My mortgage, my bills and everything else I have to pay for in life is paid for with my earnings... notional payments are not disposable income.
MNO - 22-Aug-17 @ 12:35 PM
bella - Your Question:
My ex work visa has run out so he nolonger works however he has gone and got married to a British citizen and is now on a spouse visa will I still get maintenance from him? as it's his wife which is now supporting him and she has 2 children from her previous.

Our Response:
Yes, you are still entitled to claim child maintenance foryour children, unless he has stopped earning and if so the child maintenance will be recalculated to take this into account.
ChildSupportLaws - 21-Aug-17 @ 3:38 PM
Myex work visa has run out so he nolongerworks however he has gone and got married to a British citizen and is now on a spouse visa will i still get maintenance from him? as it's his wife which is now supporting him and she has 2 children from her previous.
bella - 18-Aug-17 @ 12:14 AM
If my sons dad is off work on statutory sick pay for two weeks will he still have to pay any maintenance? Or will it just be classed as arrears and spread over the following months?
Pemstar - 1-Aug-17 @ 9:05 PM
ElephantsGerald - Your Question:
I was widowed aged 28 and receive a monthly payment from my late wife's company as an annuity. As far as I can see the "rules", this is not earned income. I am not a retired person, so it is not a pension, and I am not a pensioner. Neither is it a payment from "my" annuity. Due to the fact I receive £1,100.00 per month, I receive absolutely nothing from the State. However, the CMS have decided to take 11% gross from this sum, as an award to my daughter's mother. My rent is £650 per month and I am currently running at a negative of £250 per month. The question is whether what I receive is "earnings" or not? I have no issue paying my dues, but if I was entitled to ESA, my payments would be £7 per week. I feel I am being punished for having a legacy, that was afforded me, way before I met my child's mother?

Our Response:
A person would usually pay tax automatically on life annuity payments, at a rate of 20%. Therefore, if the amount is taxable, then it is considered an income. If you think this payment is unfair, then you can appeal/complain via the link here.
ChildSupportLaws - 11-Jul-17 @ 11:53 AM
I was widowed aged 28 and receive a monthly payment from my late wife's company as an annuity. As far as I can see the "rules", this is not earned income. I am not a retired person, so it is not a pension, and I am not a pensioner. Neither is it a payment from "my" annuity. Due to the fact I receive £1,100.00 per month, I receive absolutely nothing from the State. However, the CMS have decided to take 11% gross from this sum, as an award to my daughter's mother. My rent is £650 per month and I am currently running at a negative of £250 per month. The question is whether what I receive is "earnings" or not? I have no issue paying my dues, but if I was entitled to ESA, my payments would be £7 per week. I feel I am being punished for having a legacy, that was afforded me, way before I met my child's mother?
ElephantsGerald - 10-Jul-17 @ 6:21 PM
Mortified Father - Your Question:
THIS IS A WARNING to all Father's paying CMS who after reaching the age of 55 may be considering taking a Lump Sum from their Pension Pot!!If you do cash in a Pension Pot then I can 100% assure you that it definitely is taken into consideration by CMS when your Annual review comes up.My Annual Review letter arrived today with a massive uplift in my next 12 months of payments.I called CMS to query this as I had called them earlier in the year to question as to whether cashing in a pension pot would or would not be taken into account.The answer I received back then from the CMS was; 'No it would not be taken into account by the CMS' and so I went ahead and made serious financial decisions based on that advice.The answer I received TODAY when I queried the calculations was; 'Yes, it is taken into account and you were ill-advised (by the CMS) earlier in the year'.So, please BEWARE!!

Our Response:
Much depends upon what type of pension it is and whether it can be classed as earnings. If you were told otherwise, you can complain via the gov.uk link here.
ChildSupportLaws - 30-Jun-17 @ 11:58 AM
THIS IS A WARNING to all Father's paying CMS who after reaching the age of 55may be considering taking a Lump Sum from their Pension Pot!! If you do cash in a Pension Pot then I can 100% assure you that it definitely is taken into consideration by CMS when your Annual review comes up. My Annual Review letter arrived today with a massive uplift in my next 12 months of payments. I called CMS to query this as I had called them earlier in the year to question as to whether cashing in a pension pot would or would not be taken into account. The answer I received back then from the CMS was; 'No it would not be taken into account by the CMS' and so I went ahead and made serious financial decisions based on that advice. The answer I received TODAY when I queried the calculations was; 'Yes, it is taken into account and you were ill-advised (by the CMS) earlier in the year'. So, please BEWARE!!
Mortified Father - 29-Jun-17 @ 5:33 PM
@Fairnessisonlyright - Child maintenance is based upon earnings and if your ex has no income, then he is no longer liable to pay child maintenance even arrears.
RubyTue - 27-Jun-17 @ 3:53 PM
My ex is in arrears through non payment of child maintanence . He now has given up work as he is on statutory pensionable age . He has no private pension . I'm told the arrears can not be forcibly recovered even at £1 a week . How can this this be correct ? It seems to be a big loophole .
Fairnessisonlyright - 27-Jun-17 @ 1:39 PM
Rojr1977 - Your Question:
Hello, if you opt out of a company car, and receive a payment of a "car allowance " of £6600 PA , is this classed as income and included with net wages income? Thank you

Our Response:
You would have to ask CMS directly regarding this as it is quite a grey area. Much depends upon whether it is classed as taxable.
ChildSupportLaws - 26-Jun-17 @ 12:26 PM
Hello, if you opt out of a company car, and receive a payment of a "car allowance " of £6600 PA , is this classed as income and included with net wages income? Thank you
Rojr1977 - 23-Jun-17 @ 7:32 PM
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