Home > Earnings & Deductions > What Counts as Earnings?

What Counts as Earnings?

By: Lorna Elliott LLB (hons), Barrister - Updated: 24 May 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/CMS, 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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the cms isnt a fair company at all they have brought to my knees i first heard from them in march 2017 after saying ill get a loan to clear arears (from her being on benifits i got a big bill for the goverment ) which i paid off in full i have 2 other young children cms put them on my claim then took them off again with out any reason then said they dont live with me ? ? dont know how they worked that out then decided to back date arears to september 2016 at a high rate plus 20%on top everytime i question why they change my keyworker so i never get anything worked out ive always paid her direct but we had a falling out as she wanted me to pay her the goverment debt and was outraged when she didnt get a penny of it so she told cms i havnt been paying her even tho ive go ALL payments on bank statements they have taken her side and refuse to look at my statements and are seeking bailifs against me to pay a debt i dont owe i really cant take any more from these people and will be at blame for many deaths where fathers cant cope with life because of them
him - 24-May-17 @ 3:09 AM
I have a mutual agreement in place for access and maintenance. We live 130 miles apart and were meeting every second weekend half way. Nowe my sons Mum wants £40 per month for travel costs. Where do I stand. I pay the appropriate level of maintenance for my situation.
Torquil - 12-May-17 @ 2:13 PM
I have just changed jobs, now I recieve "tax free" food and over night allowance at work, will these monies be taken into account by cms?
Royb1982 - 4-May-17 @ 3:20 PM
Willi- Your Question:
Hi I'm about to get a medical discharge from the army. Will my invalidity pension be taken into account for child support payments ? Thanks

Our Response:
As specified in the article, any payments made under a disability pension or benefit are not counted as earnings and therefore not made assessible by CMS.
ChildSupportLaws - 4-May-17 @ 12:45 PM
Hi I'm about to get a medical discharge from the army. Will my invalidity pension be taken into account for child support payments ? Thanks
Willi - 3-May-17 @ 6:51 PM
Hi there, looking for some guidance. I'm a father paying for one child. I've had a lot of stress and worry caused by CSM lately due to phantom arrears they say I owe, 1k to be exact. I was on a collect & pay scheme and was charged 20% on top of my payments, now on direct pay to mother. The arrears arose after an argument with my ex over her spending on nights out and me arguing the fact the money was for our son not the p1$$, it was £50 per week I paid. she then decided to go CSM to shut me up and get one over as I have never not paid and I always would pay. However, they had on their records my old employment wage and dictated I should of paid £85 per week up until Christmas then the new payment of £56 per week in January onwards, with extra added on to pay arrears to the sum of £320 per month. Now, I've been in my current employment since 2014 so my wage hasn't changed but CSM refused to adjust this and I'm left with arrears, hence my view of these being "phantom" The other issue I have is they have me down as earning 5k annual, this is due to me having a company vehicle that I pay tax on. Question is, this is a benefit provided by the company so I can drive around the uk carrying out my work commitments and I don't see this 5k Is this right, can they take this into account?? I've just had a new born, 6week old and I'm on my knees, I have debts/bills and new family to support and just think this isn't right. I would never not pay and pay fair but feelim being had and it's really bringing myself and my wife down. Any advise or guidance on this would be greatly received. Thanks, Nick
Nick - 20-Apr-17 @ 11:06 PM
LMAC - Your Question:
My ex is director of his own company where it is only him who works for it. He is a contractor and earns at least £500 a day. He pays himself basic wage monthly with a dividend once a year. He pays me maintenance from that but I don't feel this is enough. He also owns several flats( most have mortgages) but gets rental income from this. Am I able to claim for more than what he is giving me? He will not give me more when I ask but don't want to lose out and end up with less as he has been very calculating. Any advice would be good.

Our Response:
It might be worth seeking advice from Child Maintenance Services regarding this, as it is impossible to assess without knowing the full details. The CMS will take your ex's full income into consideration, this involves any income made via renal property.
ChildSupportLaws - 18-Apr-17 @ 12:18 PM
My ex is director of his own company where it is only him who works for it. He is a contractor and earns at least £500 a day. He pays himself basic wage monthly with a dividend once a year. He pays me maintenance from that but I don't feel this is enough. He also owns several flats( most have mortgages) but gets rental income from this. Am I able to claim for more than what he is giving me? He will not give me more when I ask but don't want to lose out and end up with less as he has been very calculating. Any advice would be good.
LMAC - 17-Apr-17 @ 7:15 PM
Hi, my ex has recently sold his house and also some land adjacent to the house, does the profit from the sales count towards his earning for child maintenance payments?Thank you
Mrstht - 29-Mar-17 @ 4:28 PM
Joach - Your Question:
Was hoping to get some advice. My X has set up a company of which he is listed as the director. He pays himeself a wage from it and the pays my child maintenance from this wage. However he earns much more than this amount. He works off shore as s rigger. My question is should maintenance be paid on the whole of his income or kust the wage he pays himself?

Our Response:
If you think your ex is being paid far more than he is paying himself, then you may be able to take the matter to court. A court will lookat his wages and accounts in depth. However, it is worth seeking legal advice to make sure you have a strong case.
ChildSupportLaws - 27-Mar-17 @ 2:07 PM
My ex was paying Child Maintenence, then quit his job when he was forced to pay it when Child Maintenence got an attatchment to his earnings. He payed two payments since April 2016 , and admitted he quit his job so he doesn't have to pay for his son. Now I find out he's claiming anything he can get his hands on , refuses to work and breaks cars and sells the bits , also buys stuff from market and sells it online for an even bigger price. All because he doesn't want to pay child maintenance , he's getting everything paid for and still getting a lump some of money when he's stripping cars. Do I tell child maintenance or can i not do anything about it.
Kayl - 25-Mar-17 @ 2:20 PM
Was hoping to get some advice. My X has set up a company of which he is listed as the director. He pays himeself a wage from it and the pays my child maintenance from this wage. However he earns much more than this amount. He works off shore as s rigger. My question is should maintenance be paid on the whole of his income or kust the wage he pays himself?
Joach - 25-Mar-17 @ 1:11 AM
Ne - Your Question:
My stbx earns £10k (after tax) how much CSA would I get a month?He lives broad and sees child/children 2 a year (10-15days)

Our Response:
Please see CMS link here which will be able to help define an approximate figure. You may also need the REMO link here- if your ex lives abroad.
ChildSupportLaws - 20-Mar-17 @ 1:39 PM
My stbx earns £10k (after tax) how much CSA would i get a month? He lives broad and sees child/children 2 a year (10-15days)
Ne - 18-Mar-17 @ 12:50 PM
Hi, I'm just about to finishing my service of 22 yrs in the Armed Forces. I have secured a job but at a £10k pay drop, so naturally my monthly maintenance payments will change and drop by £100pm. As a part of our divorce I received no further claim - clean break order from the courts in life/death regarding my armed forces pension. can my ex wife claim my pension as an income to supplement the maintenance payments? Even with this clean break Order? As two years ago she withheld £4000 from court agreed settlement (what she says she would've been entitled too in the divorce - but she agreed not to pursue in return for me signing house over in return for a cash settlement. (All which was agreed and signed in Court divorce order)I didn't make a fuss as it had taken 8yrs to get any money she owed me, but never forget either. Since our sepeartion and last 11years I've made voluntary payments on time every month, without failure. There has been no requirement for the old CSA system to get in involved. Many thanks
SimonP75 - 4-Mar-17 @ 10:32 PM
Hi, I'm just about to finishing my service of 22 yrs in the Armed Forces. I have secured a job but at a £10k pay drop, so naturally my monthly maintenance payments will change and drop by £100pm. As a part of our divorce I received no further claim - clean break order from the courts in life/death regarding my armed forces pension. can my ex wife claim my pension as an income to supplement the maintenance payments? Even with this clean break Order? As two years ago she withheld £4000 from court agreed settlement (what she says she would've been entitled too in the divorce - but she agreed not to pursue in return for me signing house over in return for a cash settlement. (All which was agreed and signed in Court divorce order)I didn't make a fuss as it had taken 8yrs to get any money she owed me, but never forget either. Since our sepeartion and last 11years I've made voluntary payments on time every month, without failure. There has been no requirement for the old CSA system to get in involved. Many thanks
SimonP75 - 4-Mar-17 @ 10:22 PM
Hi I was wondering if anyone could help me, my ex has been working at the same place since June 16, he has been promoted and also received a tax rebate to my knowledge, he works full time hours, but was taken on for 10hr contract for his trial period, I'm unsure if he changed this, anyway I have put in a cms claim and have been given a nil rate payment, I know he's working not for himself but for a proper company, he isn't disabled or claiming benefits that I know of and he's 29, I think he's or his employer have falsely declared how much he earns, how has he managed to do this does anyone know?
Jaz - 26-Feb-17 @ 7:27 PM
I am recently self employed earning approx £70 per week. I am single, with one child living a home full time. I also receive child tax credits and working tax credits. Are both tax credits used to calculate maintenance payments? Thank you
Martin - 12-Feb-17 @ 7:11 PM
PHIL - Your Question:
Was divorced in 2011, during the CSA times, I paid all my normal payments direct based on my employment. I had accident at work now recieve a higher pension for my ill health, PIP higher rate, and industrial injuries benifit. No other income. The new CMS said they will take 24 per cent from my Pension plus £7.00 from my industrial injury payments. I have requested that the pension be disregarded as in 2011 prior to CMS my ex settled all claims , and financial agreements in court, with a court sealed consent stating we would not. Or ever claim against any pension if so awarded. The CMS state they will disregard this consent order from the court., as the child support Act states they can. I can find any part of this act that has a stautory instrument that can over arch the original consent order. They have told me if I do not pay from my very small weekly pension they will take it by direct collection. I think this action is unlawful. The attorney general said only three days ago that no government department is above the rule of law. Could you help as I think I have caused a real problem for the CMS in this issue. Alot of parents now settle child support at court for the life of the chikdren. So how can you do this when a new agency steps in and uses guidline policy to run rough shot through any legal divorce agreement that was in force years before it was created.Please where do I stand if anyone can help. No one has had a similar issue after months trying to find information. Thank you PhilPHIL - 27-Jan-17 @ 4:19 PM

Our Response:
As we can only give general guidance, your only course of action is to seek legal advice or complain/appeal, please see link here . Hopefully, someone else with more legal knowledge may see your posting and attempt to give you some advice.
ChildSupportLaws - 7-Feb-17 @ 10:02 AM
Settle pension, question below anyone have a response that could help please.
PHIL - 6-Feb-17 @ 12:30 AM
was divorced in 2011, during the CSA times, I paid all my normal payments direct based on my employment. I had accident at work now recieve a higher pension for my ill health, PIP higher rate, and industrial injuries benifit. No other income. The new CMS said they will take 24 per cent from my Pension plus £7.00 from my industrial injury payments. I have requested that the pension be disregarded as in 2011 prior to CMS my ex settled all claims , and financial agreements in court, with a court sealed consent stating we would not. Or ever claim against any pension if so awarded. The CMS state they will disregard this consent order from the court., as the child support Act states they can. I can find any part of this act that has a stautory instrument that can over arch the original consent order. They have told me if I do not pay from my very small weekly pension they will take it by direct collection. I think this action is unlawful. The attorney general said only three days ago that no government department is above the rule of law. Could you help as I think I have caused a real problem for the CMS in this issue. Alot of parents now settle child support at court for the life of the chikdren. So how can you do this when a new agency steps in and uses guidline policy to run rough shot through any legal divorce agreement that was in force years before it was created.Please where do I stand if anyone can help. No one has had a similar issue after months trying to find information. Thank you Phil PHIL - 27-Jan-17 @ 4:19 PM
PHIL - 6-Feb-17 @ 12:28 AM
Hi, I wondered if anyone could help? I have a company car from work, which they pay me money for and the car is leased in my name. They give me it in one hand and take it straight back. This is having an affect on my gross monthly wage. Is there anything I can do?
Nick - 2-Feb-17 @ 1:54 PM
Sammie - Your Question:
Hi.I use the new child maintenance service. It would seem as if my ex husband has increased his pension payments so the child support payments reduce. He now pays over £14,000 into his private pension scheme. I have asked for a mandatory re consideration but I have been told that I would have to provide evidence. It's seems there is a loophole as pension payments can be increased so that the amount of child support can be reduced. I'm at a total loss of what to do here as my payments have dramatically decreased. Any advice would be very much appreciated.

Our Response:
You would have to prove diversion of income as the new CMS rules have an anti-avoidance provision. You can take the matter further to be investigated, please see gov.uk link here. I hope this helps.
ChildSupportLaws - 2-Feb-17 @ 11:15 AM
Hi. I use the new child maintenance service. It would seem as if my ex husband has increased his pension payments so the child support payments reduce. He now pays over £14,000 into his private pension scheme. I have asked for a mandatory re consideration but I have been told that I would have to provide evidence. It's seems there is a loophole as pension payments can be increased so that the amount of child support can be reduced. I'm at a total loss of what to do here as my payments have dramatically decreased. Any advice would be very much appreciated.
Sammie - 1-Feb-17 @ 10:41 AM
I was divorced in 2011, during the CSA times, I paid all my normal payments direct based on my employment. I had accident at work now recieve a higher pension for my ill health, PIP higher rate, and industrial injuries benifit. No other income. The new CMS said they will take 24 per cent from my Pension plus £7.00 from my industrial injury payments. I have requested that the pension be disregarded as in 2011 prior to CMS my ex settled all claims , and financial agreements in court, with a court sealed consent stating we would not. Or ever claim against any pension if so awarded. The CMS state they will disregard this consent order from the court., as the child support Act states they can. I can find any part of this act that has a stautory instrument that can over arch the original consent order. They have told me if I do not pay from my very small weekly pension they will take it by direct collection. I think this action is unlawful. The attorney general said only three days ago that no government department is above the rule of law. Could you help as I think I have caused a real problem for the CMS in this issue. Alot of parents now settle child support at court for the life of the chikdren. So how can you do this when a new agency steps in and uses guidline policy to run rough shot through any legal divorce agreement that was in force years before it was created.Please where do I stand if anyone can help. No one has had a similar issue after months trying to find information. Thank you Phil
PHIL - 27-Jan-17 @ 4:19 PM
Shaz - Your Question:
My ex stopped paying Child Support (via CSA) 4 years ago when he was made redundant. The CSA then told me they do not take redundancy payments into account, so my ex will not have to pay anything. However my ex received over £60k in 'contractual' redundancy pay. He also owns properties and share options. My ex has since married, had another. I have not received a penny child support from him for 4yrs. What can I do?

Our Response:
If your ex is earning and declaring his earnings through the HMRC, then the CMS can make an assessment based upon this. However, if he is not declaring his earnings, such as rent etc, then I suggest you seek legal advice about taking the matter to court. However, you would need to ensure you have a strong case as it will cost. The court will look at your ex's accounts closely against his lifestyle, but if these earnings are going through his wife's account then it becomes more complicated again.
ChildSupportLaws - 26-Jan-17 @ 1:59 PM
Just spoke to someone in CSA re contractual redundancy. They tell me that they can only take Child Support arrears from it and not regular payments. To me that does not sound right, as I thought a percentage is calculated on taxable income when assessing a claim. Any advice?
Shaz - 25-Jan-17 @ 4:44 PM
My ex stopped paying Child Support (via CSA) 4 years ago when he was made redundant. The CSA then told me they do not take redundancy payments into account, so my ex will not have to pay anything. However my ex received over £60k in 'contractual' redundancy pay. He also owns properties and share options. My ex has since married, had another. I have not received a penny child support from him for 4yrs. What can I do?
Shaz - 25-Jan-17 @ 1:39 PM
CMA used latest tax info which was to April 2015 not April 2016 I sent 5 yrs p60 13 months payslips To no avail P60 in their eyes is not proof of income I had to call HMRC 2 mins later they confirmed correct info After another call to CMA told get letter from HMRC as proof Been trying to get correct payment as I have always paid but due to another tax it jumped from £280 a month to £570 a month God forgive bloody politicians that passed this rule Willing to pay but new family will suffer House will be up for sale Might jack job in Go on benefits Plus threats of xtra 20% charges God give me strength
CMA Victim - 24-Jan-17 @ 10:57 PM
Jj - Your Question:
As a result of a mandatory reconsideration, the amount due from my ex husband for child maintenance was reduced as of the 1st January. By the time the letter had been sent, he had paid the full original amount snd had therefore overpaid. Child maintenance have told me that he is within his rights to 'claw back' the amount overpaid on the 1st February as a lump sum. We are on a direct pay scheme but there is no communication between him and I. My query is that, when I have been owed arrears from him, they have been apportioned over a number of months with no consultation with myself. Once again, with no consultation, he has agreed with child maintenance that he will claw back in a lump sum. Is there a way of the overpayment to me being apportioned back to him? It seems totally unfair, unreasonable and biased towards the father. Many thanks in anticipation

Our Response:
You would have to speak to the CMS directly, or if you feel you have been treated unfairly complain, please see gov.uk link here .
ChildSupportLaws - 19-Jan-17 @ 11:21 AM
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