Home > Earnings & Deductions > What Counts as Earnings?

What Counts as Earnings?

By: Lorna Elliott LLB (hons), Barrister - Updated: 29 Nov 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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Hi the artical indicates CMS use net taxable earning but they have indicated to me gross.I wonder as i have a rented property and if the use gross i will lose money after paying mortgage and tax
Gary - 29-Nov-16 @ 1:57 PM
Ang - Your Question:
Hi, I've just read in newspaper that my Ex husband's employer is shutting the site he works at. He will be given 18 months wages to have time to find new employment. Can you advise me whether CMS payment for our youngest son will stop at that point? I already solely support our eldest son who is at college full-time, but am worried how I will support both sons alone on a part time wage. Just trying to prepare myself for whatever eventuality is coming.Thankyou.

Our Response:
If your ex is not earning, then it will affect his payments to you, as CMS payments are based upon taxable earnings. However, if the money is awarded to your ex as earnings and is taxable, then the CMS will take this into account.
ChildSupportLaws - 10-Nov-16 @ 10:22 AM
Hi, I've just read in newspaper that my Ex husband's employer is shutting the site he works at. He will be given 18 months wages to have time to find new employment. Can you advise me whether CMS payment for our youngest son will stop at that point? I already solely support our eldest son who is at college full-time, but am worried how I will support both sons alone on a part time wage. Just trying to prepare myself for whatever eventuality is coming. Thankyou.
Ang - 9-Nov-16 @ 1:41 PM
Hello Child support is a scam it's not means tested it's not about children it's about profit The most important question is contact access involvement with our children Not how much money they can steal on a make believe charge Out if 15,500 this I would have paid £5100 in payments an chargers How is this in my children's best interests to abuse their father financially so that they are being denied Xmas birthday holiday and presents full stop When the parent with care get housing minus the new £50 deduction a week but child an working tax credits child support payments part time wage money coming in of siblings and co habitive partner who also pays to abide in pwc home ??? Abuse without a doubt The contract you Cms are in breach It's repudiate or repudiation Which is serious of the nature or failings You are not fit for business Common sense is lacking grey matter if you steal a prisons lively hood so they cannot provide basic needs for their child by the theft When you talk to the advisor or line managers they get snotty because Contract law consumer rights law the fair financial act law the human rights act the children act 1989 Don't talk to me about legislation We are child support laws and we are not governed by any of those laws We'll it's abuse of practice and again it's not fit to practice Why should children suffer under an unfair act that encourages fathers not to work or be invoked with their children Or fathers that engaged with their children home owners pay taxes and pay to be with their children This law is an arse the people backing this think tank are an arse If the pwc refuses an offer then that's their choice not Cms to attack a persons wages and then they say be grateful ? I don't understand children's needs % of a mans wage be real this is not about men men have no voice but can be a 1950's breadwinner on a third of his wage to two or more households Just a scam being used to exploit money backed up by snide law about saving money so that the state does not have to provide more than it should for children's provision If parents cannot agree and use the children to exploit money then They should have the pwc taken away from them it's abuse of children And their needs Cms is a scam
Dave - 4-Nov-16 @ 11:44 PM
Can the CSA make a deduction from earnings, for arrears, against my Police Disability Pension ?
Iryna - 2-Nov-16 @ 3:10 PM
I have been paying for my two daughters direct to my ex on a calculation from the CSA however my ex has now instigated a new claim via the CMS and they are taking into account my company car as earned income which increases my liability by over £100 a month. I read somewhere that at appeal a ruling was made that a company car which is a necessity in my job should not be used in any calculation as I had not received the money and pay additional company car tax. My net income this year is actually less than previous years BUT my CMS liability is almost double. can you advise?
Gary - 25-Oct-16 @ 7:07 PM
Matthew - Your Question:
Hello.I am serving member of the RAF paying child support via the CMS for one child, although this is not subject to a maintenance order.Next year I will be eligible for a commitment bonus. It will be the only bonus I receive in my career and will count as taxable income. I've read elsewhere that regular bonuses are taken into accoubt but that one off payments often aren't, however, nobody can give me a definitive answer. Therefore, can you tell me if the CMS are likely to include this when calculating how much I should pay in child support?Thanks.Matthew

Our Response:
As a rule any taxable earnings can be taken into account with regards to child maintenance paid from bonuses, commission, overtime payments or royalties.
ChildSupportLaws - 13-Oct-16 @ 12:47 PM
Hello. I am serving member of the RAF paying child support via the CMS for one child, although this is not subject to a maintenance order. Next year I will be eligible for a commitment bonus. It will be the only bonus I receive in my career and will count as taxable income. I've read elsewhere that regular bonuses are taken into accoubt but that one off payments often aren't, however, nobody can give me a definitive answer. Therefore, can you tell me if the CMS are likely to include this when calculating how much I should pay in child support? Thanks. Matthew
Matthew - 12-Oct-16 @ 9:28 PM
Hi Recently i have suffered loss of earning due to a car accident, which wasn't my fault. I used to sacrifice a part of my pay(£243) for childcare voucher. Now while calculating the loss of earning my solicitor is unwilling to consider this £243 as a part of my salary. Is that correct?
Chitra - 12-Oct-16 @ 10:23 AM
Marly- Your Question:
I live in the republic of ireland and my ex husband lives in leeds England he has stopped sending me maintenance because I live here I don't know how to go about getting what my child is owed please help

Our Response:
You don't say whether you have a maintenance order in place, if not you can see more via the link here.
ChildSupportLaws - 11-Oct-16 @ 10:46 AM
I live in the republic of ireland and my ex husband lives in leeds England he has stopped sending me maintenance because I live here I don't know how to go about getting what my child is owed please help
Marly - 10-Oct-16 @ 9:37 AM
redhoggle - Your Question:
I currently pay £519 maintenance to the CMS but have the option of retiring in January--This would give me a possible lump sum of 60k which is tax free and a pension of £12000 per annumCan the CMS use my lump sum as a source of income or can they only use my pension for their calculations?

Our Response:
The CMS will not generally take a tax-free lump sum into consideration. However, you may wish to check if there is ceiling to this lump sum amount before assessment is considered. Plus, if a parent has substantial unearned income, the other parent can request a variation of the maintenance calculation. Your 'taxable' pension income will be assessed with regards to child maintenance payments.
ChildSupportLaws - 5-Oct-16 @ 11:15 AM
I currently pay £519 maintenance to the CMS but have the option of retiring in January--This would give me a possible lump sum of 60k which is tax free and a pension of £12000 per annum Can the CMS use my lump sum as a source of income or can they only use my pension for their calculations?
redhoggle - 4-Oct-16 @ 10:25 AM
I am about to reach 55 years old.I am considering cashing in some pensions into lump sums to pay off debt, etc.When I divorced 6 years ago, my ex wife did not make a claim in the court for my pension.So she has no legal right to my pension anyway.At the moment I regularly pay a monthly fee via the CMS for my children.My question is;if I cash in some of my pension and receive a lump sum, will this count as income and thus bump up my payments to my ex wife next year because the CMS will include it in the annual review?
soldier - 23-Sep-16 @ 7:30 PM
I have paid csa for the last few years for both my sons. The last two years I overpaid by about £150 a month which was fine. During the previous tax year I was required to work a certain amount of overtime which has not been an option at all this year. The csa looked at my earnings in June and worked out I should pay £257 a month. The new child maintenance have just told me I should now pay £404 a month. (I am not earning any more then I was in June!) This opens up two questions; 1) the amount is being worked out against earnings I no longer get. Is this correct? 2) I also receive a small army pension, is this part of what they take into consideration even it is under £10k? I am not in a highly paid job so as you can imagine this is a huge increase. Also my oldest is a paid apprentice going to college one day a week.
Bob1973 - 15-Sep-16 @ 6:32 PM
Hi, My ex and I have a 5yr old son. He has a 10yr old daughter from a previous relationship(though no longer lives in the uk) and an 18 month old son who lives with him. I know the 18 month old will be taken into account when working out payments but will the 10yr old be?
K - 10-Sep-16 @ 7:28 PM
Pattym30 - Your Question:
My ex is relocating to Wales shortly but may not have a job when he first moves however he will have capital of approx £100k from the proceeds of the sale of his house. I have been told I can take him to court under section 1 to obtain a lump sum sum from his assets. Is this correct & if so how do they calculate what percentage I would be entitled to recieve? I have also been told I can recieve the lump sum & still claim CMA?? I would appreciate it if someone could advise how to work out how a capital asset is calculated into an income.

Our Response:
You would have to seek legal advice regarding this as we can only advise on general, non-specific questions.
ChildSupportLaws - 30-Aug-16 @ 2:55 PM
My ex is relocating to Wales shortly but may not have a job when he first moves however he will have capital of approx £100k from the proceeds of the sale of his house. I have been told I can take him to court under section 1 to obtain a lump sum sum from his assets. Is this correct & if so how do they calculate what percentage I would be entitled to recieve? I have also been told I can recieve the lump sum & still claim CMA?? I would appreciate it if someone could advise how to work out how a capital asset is calculated into an income.
Pattym30 - 30-Aug-16 @ 6:17 AM
I presently pay 25% of earnings as maintenance payment. I am now at risk of redundancy with a potential redundancy payment of £50k. How will the CSA take this into account for any maintenance payment? i.e. Will I be obliged to pay an ongoing weekly amount, or will a £12.5k lump maintenance payment have to be paid? Likewise, if I take an additional £40k tax free lump sum out of my occupational pension, what maintenance will need to be paid? Jona
Jona - 15-Aug-16 @ 2:55 PM
My ex has just retired from the police on ill health grounds and received a lump sum payment to which he has paid into for 27 years. He pays regular CSA to me, will this amount now go down as his monthly income has dropped and he only receives his pension as an income, baring in mind he has had a lump sum payment over 100k? Thank you
clar - 28-Jul-16 @ 12:03 PM
Mitch74 - Your Question:
My ex partner has recently put in s claim to CMS despite the fact I've always paid her maintenance every month, even when I was self employed and not earning a great amount. I paid £280 a month for my two girls plus extras, including savings for them and I have them roughly 80 nights a year. This was a mutually agreed figure but she has been hinting for some time, that she thinks I should increase it. I took on a job last October that meant I was employed, this has increased my wages. Which is why I am sure my ex has approached the CMS! My ex and husband are on a very high wage between them, but I know that unfortunately that isn't taken into account. My questions are; 1. I am paying into a private pension, so how much of that, do the CMS take into account? 2. My ex has told me she will no longer provide clothes for the girls to wear on the weekends I have them. Is that something she's entitled to do? It seems unfair in light of me now paying her extra money!

Our Response:
The rate of maintenance you must pay depends on your gross weekly income. Gross income is money you earn before Income Tax and National Insurance are taken off, but after occupational or personal pension scheme contributions are taken away, please see CAB link here. We have many parents that ask the question, 'should I provide nappies, clothes etc?' The answer is that non-resident parents should have supplies of these items in their home as they are necessary requirements to all parents bringing up children.
ChildSupportLaws - 27-Jul-16 @ 10:34 AM
My ex partner has recently put in s claim to CMS despite the fact I've always paid her maintenance every month, even when I was self employed and not earning a great amount. I paid £280 a month for my two girls plus extras, including savings for them and I have them roughly 80 nights a year. This was a mutually agreed figure but she has been hinting for some time, that she thinks I should increase it. I took on a job last October that meant I was employed, this has increased my wages. Which is why I am sure my ex has approached the CMS! My ex and husband are on a very high wage between them, but I know that unfortunately that isn't taken into account. My questions are;1. I am paying into a private pension, so how much of that, do the CMS take into account? 2. My ex has told me she will no longer provide clothes for the girls to wear on the weekends I have them. Is that something she's entitled to do? It seems unfair in light of me now paying her extra money!
Mitch74 - 26-Jul-16 @ 12:41 PM
Jazzi - Your Question:
Hi, my daughters father earns a substantial amount of non taxable income (50-100k), this is because he received national lottery funding. He also received sponsorships which I believe he has to pay tax on. He has been paying me £140 a month for 2 years but I have recently been told he has provided proof that he doesn't earn taxable income anymore so he doesn't have to give me a penny for my daughter. He is self employed and I know he has a regular income as he has brought a property. I am unsure to where I stand with this, I know he must have some income where he is taxed on but somehow his managed to hide this from his accounts. I am really not sure what to do.

Our Response:
I suggest you seek legal advice. If he is syphoning off income, then while the CSA/CMS may not to be able to prove this, a court might through looking more closely at his lifestyle and accounts. However, you would have to be sure that he has purchased property etc from 'income'. If he has brought the property from savings this would not help you, as it is income and income alone that is assessed towards child maintenance. Therefore, you would have to be sure in your evidence, as you could be landed with the court costs if you cannot categorically prove your ex is earning and he in turn can prove that he is not.
ChildSupportLaws - 18-Jul-16 @ 2:12 PM
Hi, my daughters father earns a substantial amount of non taxable income (50-100k), this is because he received national lottery funding. He also received sponsorships which I believe he has to pay tax on. He has been paying me £140 a month for 2 years but I have recently been told he has provided proof that he doesn't earn taxable income anymore so he doesn't have to give me a penny for my daughter. He is self employed and I know he has a regular income as he has brought a property. I am unsure to where I stand with this, I know he must have some income where he is taxed on but somehow his managed to hide this from his accounts. I am really not sure what to do.
Jazzi - 17-Jul-16 @ 8:23 PM
Hi my ex partner earns a lot of money, but says he's self employed and only pays himself £1000 a month. I'm not sure he is self employed, is there anyway I can find out? I spoke to csa in England and they won't look at what his business earns only what he pays himself. He has made it clear he will hide money. So my children will miss out. Any help would be appreciated.
star - 9-Jul-16 @ 10:25 PM
Hi, my son is 18 months and his his father has never taken any responsibility for him . After 3 months of coming back into our lives and me have to fund his fare money to get to us he has decided again that it is ' too much for him to cope with ' so I am now considering claiming child support as he has never spent a penny on him and I know never will . I have also just found out that he is cashing in a lump sum army pension in September.Would we be entitled to any of that as well ?
mug - 2-Jul-16 @ 7:14 AM
Loug73 - Your Question:
My ex-partner pays me child maintenance via mutual agreement every week. However he is apparently going to be on long term sick and states he won't be able to afford to pay me at all. What happens there??

Our Response:
You can continue with the mutual agreement and take into account the fact he will be earning less (if you went through the CMS and CSA and his wages reduced then these agencies would also take this into consideration and reduce his payments accordingly). If your ex is on long term sick, then it depends upon what he will be living on; if he is on a full-time wage, then you would not expect your child maintenance to change. If he will be living on SSP and his income is reduced significantly, then unfortunately so would his maintenance payments to you.
ChildSupportLaws - 21-Jun-16 @ 10:56 AM
My ex-partner pays me child maintenance via mutual agreementevery week. . However he is apparently going to be on long term sick and states he won't be able to afford to pay me at all. What happens there??
Loug73 - 20-Jun-16 @ 12:10 PM
Jo B - Your Question:
Hi, I split from my ex 13yrs ago and haven't had a penny out of him since. Although my son is 18 now he is special needs, which has for all these years made me his carer and therefore unable to work can I make a claim against him for loss of income? as I was studying for a degree when he left, and as said haven't been able to work since. Thanks Jo

Our Response:
You don't say why you haven't had money from your ex, therefore it makes it difficult to advise without knowing why he hasn't paid or whether you have made a previous claim. If your ex is earning then you may still be able to make a claim if your son is remaining in education. I suggest in this instance you call the CMS directly for advice, please see link here .
ChildSupportLaws - 20-Jun-16 @ 10:56 AM
hi, I split from my ex 13yrs ago and haven't had a penny out of him since. Although my son is 18 now he is special needs, which has for all these years made me his carer and therefore unable to work can I make a claim against him for loss of income? as I was studying for a degree when he left, and as said haven't been able to work since. Thanks Jo
Jo B - 19-Jun-16 @ 5:57 AM
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