Home > Earnings & Deductions > What Counts as Earnings?

What Counts as Earnings?

By: Lorna Elliott LLB (hons), Barrister - Updated: 1 May 2016 |
 
Earnings Csa Maintenance Child Deduction

The CSA 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 CSA, 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, 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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Share Your Story, Join the Discussion or Seek Advice..
[Add a Comment]
Hi, i've been unable to work for the last 12 months due to illness claiming ESA. The reason for my illness is currently going through courts, if i am paid for loss of earnings, both retrospectively and future, where will i stand with the child support payments? Ive been ordered to pay £0 per month but have been managing £40 per month so far. Thanks.
42shades - 1-May-16 @ 11:10 AM
Samr8611 - Your Question:
I have an ongoing case with cm my ex partner has never paid for our 9 month baby, they have said they will put a deduction of earnings order on him, but as far as I'm aware he is self employed is anyone else in the same situation that could help or know if cm can do something with him being self employed?

Our Response:
I'm afraid it is always a tricky situation with paying parents who are self-employed as it is very easy to make it look as though a person is not earning a significant income when expenses are high, or if your ex has just started in self-employment very often it takes a long time to actually see profit against expenditure. It means there is little you or the CMS can do to extract money from a low income, despite your ex being registered with the HMRC.
ChildSupportLaws - 27-Apr-16 @ 11:32 AM
I have an ongoing case with cm my ex partner has never paid for our 9 month baby, they have said they will put a deduction of earnings order on him, but as far as I'm aware he is self employed is anyone else in the same situation that could help or know if cm can do something with him being self employed?
Samr8611 - 26-Apr-16 @ 12:00 PM
Loophole: a father can use the CMS to override a court order for maintenance after 12 months, take voluntary redundancy (example 50K), inform the CMS the next day they have no income and and not bother getting a job for 2 years, stops paying child maintenance and discards there responsibilities whilst using the money to go on lavish holidays and living like a king! And the CMS helped him do it! Absolutely disgraceful!!!!
Keith - 22-Apr-16 @ 7:16 AM
I've been paying csa for the last 4 years, I've just medically retired with a cash lump sum, I was taxed 20 p on my final wage slip, what is my standingin regards to carrying on making payments ?
Wally - 21-Apr-16 @ 12:44 PM
My partner was on sick for one week and was told she still had to pay full amount as protected earnings is 495 month after she had 4 weeks sick pay 312 then csa said she as to pay 20 a week is this correct she as fallen below protected earnings and she was also having to pay maintenance for a child living with her due to dad wouldn't cancel child benefit so you claim child benefit you can claim maintenance what a joke csa wouldn't do anything I think there think she was lieing now she owes over two grand arrears for a child that lived with her in the end she said to her son go live with you're dad she couldn't afford to keep him she should have been getting child benefit and maintenance instead paying maintenance and getting no child benefit csa is a joke
Tod - 16-Apr-16 @ 10:13 PM
My ex is claiming JSA he has also received pension lump sums totalling just over £15k since Jan 2015, he has not been drawing a regular income from his pension however. Does this mean this money is disregarded?
Jofo78 - 9-Apr-16 @ 8:48 AM
HelenaA - Your Question:
Hi.Pardon my horrid English, but I hope you understand what I am trying to say. I have this troubling situation. The case is that I have a friend who is unemployed and therefore unable to pay any support for his ex. However, I live abroad and would like him to visit me this summer. I would pay his flights and upkeep. He refuses my offer because he's afraid his ex - and the court - would think _he_ is the one having money to travel abroad and do things he shouldn't afford. Naturally no money would even visit any his account as it is possible to book and pay flights for other people.So, is there any way I could enjoy his company for a couple of weeks so that it wouldn't anyhow interfere with the existing CSA agreement/decision? Also, is he even allowed to travel abroad for any reason?Thanks in advance.

Our Response:
There is nothing to stop your friend coming to visit you. If he is not working then the court will not chase him for money as child maintenance is purely based upon earnings, therefore he does not have to justify his actions.
ChildSupportLaws - 5-Apr-16 @ 12:48 PM
Hi. Pardon my horrid English, but I hope you understand what I am trying to say. I have this troubling situation. The case is that I have a friend who is unemployed and therefore unable to pay any support for his ex. However, I live abroad and would like him to visit me this summer. I would pay his flights and upkeep. He refuses my offer because he's afraid his ex - and the court - would think _he_ is the one having money to travel abroad and do things he shouldn't afford. Naturally no money would even visit any his account as it is possible to book and pay flights for other people. So, is there any way I could enjoy his company for a couple of weeks so that it wouldn't anyhow interfere with the existing CSA agreement/decision? Also, is he even allowed to travel abroad for any reason? Thanks in advance.
HelenaA - 4-Apr-16 @ 4:08 PM
Hi I'm really hoping someone can help me my husband has paid Csa regularly for the past 4 years. Today he phoned to give them some figures from recent wageslips and they asked him for our tax credit details saying that they include it as income. I'm really confused as surely the tax credits I receive jointly with my husband is for our two children. I have no problem with him paying Csa out of his wages but now they want to take our children's money, even though she his ex claims tax credits herself. Please help I feel sick with worry as its not something we can afford.
Lml - 31-Mar-16 @ 3:28 PM
Reubansmomma - Your Question:
Hi. I was hoping for some help/adviceMy soon to be ex husband currently pays for our son, and does whatever amount the CMS say is correct But I happen to know that he could get a lot of money left to him via a will and possible sale of a house. The case is still open and I'll be keeping it open for a while so will CMS deem that as income and my son gets a percentage ? I am new to all of this so not really sure where to start! I know CMS will annually review his income My son needs some costly equipment which is why I ask.Many thanks

Our Response:
Inheritances aren't touched by the CMS, child maintenance is based on earnings alone.
ChildSupportLaws - 24-Mar-16 @ 11:59 AM
Hi. I was hoping for some help/advice My soon to be ex husband currently pays for our son, and does whatever amount the CMS say is correct But I happen to know that he could get a lot of money left to him via a will and possible sale of a house. The case is still open and I'll be keeping it open for a while so will CMS deem that as income and my son gets a percentage ? I am new to all of this so not really sure where to start! I know CMS will annually review his income My son needs some costly equipment which is why I ask... Many thanks
Reubansmomma - 23-Mar-16 @ 2:36 PM
gerty123 - Your Question:
My ex husband as a army pension does the child maintenance take this into account as it's taxable income.

Our Response:
I suggest in this instance you contact the CMS directly via the link where you can chat online with an Options agent here.
ChildSupportLaws - 21-Mar-16 @ 11:18 AM
My ex husband as a army pension does the child maintenance take this into account as it's taxable income.
gerty123 - 18-Mar-16 @ 11:30 AM
Hi, My ex husband is currently paying the maintenance for his daughter but he refuses to see her, his choice. Come May this year he is being made redundant and will be receiving well above the statory redundancy pay, he is getting roughly £90,000. When he ceases his employment, will he still be oblidged to pay me the maintenance or will it stop? Much appreciate any help.
kezza - 17-Mar-16 @ 1:59 PM
shating - Your Question:
A friend was a few months in arrears with csa payments as he was out of work, he had a job over Xmas for a period of one month, he never received any wage slips p45 or anything from the company nor did he receive the two weeks in hand he did, then in Jan after being out of work for another month he received an out of court settlement for a personal injury and within fortnight he has had he's account frozen and is still out of work. Can they do this?

Our Response:
I have included the leaflet: What action can the CSA take if parents don't pay? here which should tell you all you need to know.
ChildSupportLaws - 15-Mar-16 @ 12:26 PM
A friend was a few months in arrears with csa payments as he was out of work, he had a job over Xmas for a period of one month, he never received any wage slips p45 or anything from the company nor did he receive the two weeks in hand he did, then in Jan after being out of work for another month he received an out of court settlement for a personal injury and within fortnight he has had he's account frozen and is still out of work. Can they do this?
shating - 14-Mar-16 @ 1:55 PM
Hi i have been paying CSA since 2012 . since then i have been travelling to london from bristol every fornight by car to see my daughters in a contact centre for a supervised contact 40 pounds a session because of the lies she told . in october 2014 i lost my main contractor . i payed for 6 months from my savings even though i didnt have a job so it look good in court to keep getting contact. for after 6 months i stop paying and started agency work it is not stable i explained this to them last year that its not stable it goes on bills. they ask me why dont i seek some kind of benefit i explained to them im not entitles because no public funds is my visa conditions . now they send me a letter saying i owe 2700. now they sending me a form of how much petrol i use to pay to go to london and all this nonsense . why didnt they send this in the beginning when i told them im struggling? so i want to know what to do becasue i dont have 2700 sitting on. feel like just leaving the country all together to be honest
stinga - 13-Mar-16 @ 2:08 PM
Hello I provided details to the CSA of my income and expenditure as requested, I live with my parents as my ex partner is in our home, I pay my parents £50.00 p.w. in cash on a Friday for housekeeping (not including food) but the CSA don't seem happy with this and seem to want to dispute it. How can my parents prove this, I don't have a bank account at present and I am paid cash by my employer each week. Thanks for any advice
BillyWhiz - 10-Mar-16 @ 12:54 PM
I am currently paying csa for my son. As well as my wages do my child tax credits, working tax credits and child benefit count as my weekly income. I also have 3 children at home.
xoxo - 1-Mar-16 @ 11:03 AM
Kelly- Your Question:
Hi I have a 5 year old and 11 month old. My ex has no contact with them due to being a violent waste of space. Iv gone through CSM and they have calculated his weekly income to be £18.50 so he only pays £7 a month! However he's an ex army Sargent, who got made redundant with a very large lump sum pay out, and an army pension. He also works both as a lorry driver and in high security, often in different countries. However, he tends to work for weeks / months at a time, then not for a while. He has a brand new car, flies regularly 1st class to Thailand, and an £8000 watch, so how can he get away with saying his income is so low? Thanks for reading

Our Response:
It's a tricky situation to overcome, especially if he is self-employed (which means he can get away with declaring less if he employs a good accountant). If you feel you have been treated unfairly, then you can complain here.
ChildSupportLaws - 22-Feb-16 @ 12:43 PM
Hi I have a 5 year old and 11 month old. My ex has no contact with them due to being a violent waste of space. Iv gone through CSM and they have calculated his weekly income to be £18.50 so he only pays £7 a month! However he's an ex army Sargent, who got made redundant with a very large lump sum pay out, and an army pension. He also works both as a lorry driver and in high security, often in different countries. However, he tends to work for weeks / months at a time, then not for a while. He has a brand new car, flies regularly 1st class to Thailand, and an £8000 watch, so how can he get away with saying his income is so low? Thanks for reading
Kelly - 21-Feb-16 @ 3:19 PM
Jomcl - Your Question:
My ex partner is currently unemployed and not paying child support for our daughter but he will soon recieve a £40,000 claim from a road traffic accident would this be classed as income to the csa??

Our Response:
Non-taxable income, not classed as earnings, includes; compensation or damages awarded for personal injuries whether received in one lump sum or over a period and whether awarded by a court or out of court settlement and/or interest up to the time of judgment awarded by a court on compensation or damages for personal injuries.
ChildSupportLaws - 15-Feb-16 @ 12:50 PM
My ex partner is currently unemployed and not paying child support for our daughter but he will soon recieve a £40,000 claim from a road traffic accident would this be classed as income to the csa??
Jomcl - 14-Feb-16 @ 9:26 PM
Hi, I am going through a tribunal appeal against my ex (NRP). He has investments and capital in excess of £64,000 which he has not disclosed to CSA. He increased his pension contribution to 17% shortly after our separation. His pension pot is in excess of 150k. He is collecting Childcare vouchers from his employer and is not contributing towards my child's childcare costs. He does not have any other children. He has been doing this over the period of 2 years. How will the judge assess the variation in Pension increase, capital disclosure and childcare? Does anyone have experience of something similar? Thank you
Zara - 28-Jan-16 @ 12:15 PM
I'm currently trying to sort out maintenance with my ex. I'm unsure if he will be honest to inform me of pay increases and bonuses he gets. I said I would therefore do it through csa direct. He stated that if I do this it would not include his bonus anyway as that is a not guaranteed income. Can you advise if bonuses are included and my best way forward and with pay increases. Many thanks
Jenny - 23-Jan-16 @ 3:23 PM
Do taxable benefits count as gross income? Specifically a company car. Thanks
seekingguidence - 11-Jan-16 @ 10:10 PM
I was ordered by the court to pay child support for my son. I see him every other weekend, holidays, and 30 days in the summer. I want to know if I could file him on my taxes? I was told by someone that I could file him for six months, but I still feel misguided.ms
Tip - 7-Jan-16 @ 10:07 PM
CBC - Your Question:
My ex-husband got sacked from his teaching job last year. Since then he has been running his own company, which he started 5 years ago. Throughout those 5 years he was having to financially support the company. He has now told me that he can no longer pay Child maintenance for his 3 children as he no longer has an income. When I've asked him how he is financially supporting himself, he's told me the company is paying him back his directors loan, but this can't be classed as an income for child maintenance purposes. Is this right?

Our Response:
When a non-resident parent is self-employed it is often very difficult to obtain the levels of child support required. A good accountant will usually be able to sideline income, or your ex may be genuinely in financial straits which means he is not in receipt of an income. I can only suggest speaking to Child Maintenance Services directly regarding this.
ChildSupportLaws - 4-Jan-16 @ 2:39 PM
My ex-husband got sacked from his teaching job last year.Since then he has been running his own company, which he started 5 years ago. Throughout those 5 years he was having to financially support the company.He has now told me that he can no longer pay Child maintenance for his 3 children as he no longer has an income.When I've asked him how he is financially supporting himself, he's told me the company is paying him back his directors loan, but this can't be classed as an income for child maintenance purposes.Is this right?
CBC - 4-Jan-16 @ 1:17 PM
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