Home > Earnings & Deductions > What Counts as Earnings?

What Counts as Earnings?

By: Lorna Elliott LLB (hons), Barrister - Updated: 8 Apr 2018 |
 
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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[Add a Comment]
skint - Your Question:
Hi,i have been earning 20k a year on top of my basic salary due to working A LOT of overtime as I was buying a new house, I had a personal agreement with the mother but she has decided to contact CMS and now they want an astronomical amount off me each month which without any overtime isnt humanly possible for me to live. how do I get round this? I was paying her exactly what the government calculator worked out based on my basic salary but now she wants a cut of my overtime which ive put my live on hold to earn.whats the deal?

Our Response:
Child maintenance is based on all your earnings (not just your basic income) and assessed via income tax paid via HMRC. If your income changes i.e you stop working overtime, then you can refer the matter back to CMS. However, the assessed figure must go up or down by at least 25 per cent for CMS to look again at your payments, please see link here. On the basic rate, if you’re paying for one child, you’ll pay 12% of your gross weekly income, two children, 16% and three or more 19% of your total weekly earnings.
ChildSupportLaws - 9-Apr-18 @ 2:51 PM
hi, i have been earning 20k a year on top of my basic salary due to working A LOT of overtime as i was buying a new house, i had a personal agreement with the mother but she has decided to contact CMS and now they want an astronomical amount off me each month which without any overtime isnt humanly possible for me to live. how do i get round this? i was paying her exactly what the government calculator worked out based on my basic salary but now she wants a cut of my overtime which ive put my live on hold to earn. whats the deal?
skint - 8-Apr-18 @ 8:41 PM
@Paddy - good point. In terms of CMS it is still classed as gross earnings and CMS don't take your living expenses into account. I'd ask CMS directly and if you can I'd like to know the answer as I live in London and never thought about that aspect.
Sam - 29-Mar-18 @ 10:49 AM
What about London Allowance and London Weighing ? My salary is higher by almost 7k pa because of that. Is it still added to the gross salary. If yes, then why?
Paddy - 28-Mar-18 @ 12:51 PM
I may be finishing work on IHR with a payment of 20k. Can my cms take this money off me or will they just look at taking money out of my job seekers allowance?
Citywill - 26-Feb-18 @ 4:20 PM
Deano - Your Question:
I have been paying CMS from my account to hers not a problem but I receive a notice to say I could cash in part of a pension and received the money now is this classed as earnings for the CMS to make caluations from please

Our Response:
As outlined in the article, child maintenance is based upon taxable earnings. You can see more regarding what is classed as taxable and non-taxable earnigns via the link here, which should help answer your question further, if this article hasn't.
ChildSupportLaws - 16-Feb-18 @ 3:04 PM
I have been paying CMS from my account to hers not a problem but I receive a notice to say I could cash in part of a pension and received the money now is this classed as earnings for the CMS to make caluations from please
Deano - 16-Feb-18 @ 1:43 PM
TQ - Your Question:
I’ve been paying csa for year at agreed amount, they have changed to cma and so re calculated and are now wanted to take money from company car allowance the tax man adds to my wages to be able to tax me to pay for the car and so will now be hit twice and so have to pay my ex for having a car? It doesn’t make sense but they are now threatening me with sedition if earning? Can I appeal the car allowance being used as an earning?

Our Response:
You can see what counts as 'earnings' via the link here, which should help answer your question.
ChildSupportLaws - 23-Jan-18 @ 11:40 AM
I’ve been paying csa for year at agreed amount, they have changed to cma and so re calculated and are now wanted to take money from company car allowance the tax man adds to my wages to be able to tax me to pay for the car and so will now be hit twice and so have to pay my ex for having a car? It doesn’t make sense but they are now threatening me with sedition if earning? Can I appeal the car allowance being used as an earning?
TQ - 22-Jan-18 @ 8:52 AM
Hi, For the last three years I send all my SIPP payments through to the CMS and everyone they do not take them into account. I believe this is because they are not “occupational” Recently my employer enrolled me into Smart Pension - this acts in exactly the same way as my SIPP so I am expecting the same treatment. My confusion is - I read on numerous websites that ALL pension contributions need to be taken into account and a recent FOI request to DWP stated that private pension contributions should be taken into account. I would be grateful for you view?
Dilbert - 23-Dec-17 @ 12:42 PM
Clarelousmith - Your Question:
My ex partner is out of work due to an accident that has left him currently disabled and unable to work until he's fully rehabilitated which could be years, he will be receiving an insurance payout in excess of £400,000, my question is, as he is now unable to work will his child support payment for our child now stop as he no longer has an income from work? Because this is what he has told me

Our Response:
Child maintenance payments are based on taxable income and earnings. Insurance benefits paid if a person is sick, disabled or unemployed to meet their financial commitments are generally classed as non-taxable, please see CAB link here .
ChildSupportLaws - 22-Dec-17 @ 10:42 AM
My ex partner is out of work due to an accident that has left him currently disabled and unable to work until he's fully rehabilitated which could be years, he will be receiving an insurance payout in excess of £400,000, my question is, as he is now unable to work will his child support payment for our child now stop as he no longer has an income from work? Because this is what he has told me
Clarelousmith - 21-Dec-17 @ 5:36 PM
I have happily been living with a DEO for years via the CSA, now I'm told I have to make a new arrangement but dealing with the ex is like trying to juggle hot pokers. Can I just stay with a DEO through CMS?
MarkB - 19-Dec-17 @ 9:37 PM
@Dibdob - if you are out of work, you shouldn't have to pay child maintenance. You need to get in touch with CMS and say you have no income coming in.
TomG - 4-Dec-17 @ 2:49 PM
Hi there Wondering if you could help me or give me some advice I have a 14 old son to my ex partner I have always paid the agreed amount set by csa/CMS or my ex partner I have never missed a payment and always seen my son until ,The CMS got involved this year I was living in a damp 2 bed house with my wife and 2 kids age 4 boy n 6 girl they where sharing the same bedroom My oldest son would come and stay over most weekends but sleep down stairs on the sofa bed and I'd sleep down straits with him Me n my wife couldn't afford anything bigger as we had childcare cost But last year my ex employers asked my to work away for 12 months 7 days a week Triple my current pay on a bonus system etc So I did and earned 85k for one year only This allowed to get a mortgage on a proper 4 bed house which I explained to my ex It was a one off I was earning lots of money I would drive for hours without any sleep at weekends so I could still see my son still Then soon as the 12 months where up the bonus scheme stopped and I was back on 18k to 21k basic money with no overtime Me n my wife set aside just in case my earning came back down We wasn't bothered as we had a nice house for all the kids to enjoy and my oldest lad had his own bedroom We even brought a Tv n bed on a Visa card to make it nice for him It meant cutting back but we just wanted somewhere nice for them But our childcare cost dropped down to 120 a week from 250 at a high of 350 as my wife's mom as helped us out Soon as we got the house my ex contacted the CMS as I explained I have not got the kind of money coming in to pay what me and her agreed and the cost of the new house She didn't believe even thought I shown her letters from the company n wages slips Next min I get put on temp lay off without any pay where I can't even sign on or find another job as I would lose my rights of employment CMS contact me and asked me for 200 pounds a week plus based on my last years earning I explained I was in n out of work so they waited 8 weeks and re asset my case And it came down to 37 pounds a week I was allowed to work for 314 a week top line That's was take home 260 then take away 37 for CMS I can't even pay my bills childcare cost or mortgage cost of running a car to pick my son up every weekendwho lives 30 pound fuel trips away Cost of running a car etc My car 15 years old with 130k on it It got to the point where I was stressed as I was putting all the pressure on my wife to do overtime to pay most of the bills and my CMS Next min I fall n hurt my back at work I have to leave my job I'm current been out of work I've tried begging with my ex to sort things out between us n not the CMS as I can't afford to work n run a car to pick my son up and get to work Each week cos if I have a job the CMS don't take into account my cost of childcare for my other two children and my mortgage cost to keep a roof over my families head I've no
Dibdob - 3-Dec-17 @ 8:55 PM
Paul - Your Question:
I’ve been on ssp since September. Does being on ssp affect the amount of maintenance I have to pay. I usually pay £200 a month but my ssp only gives me £500 a month. If I was to pay the usual amount. I wouldn’t be able to afford my own rent and bills. I read something saying that while I was on ssp I would only have to pay £5 per week. What is correct as I want to make sure I do things correctly while also not leaving myself not being able to pay bills

Our Response:
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, 5% or more for CSA cases which began after 3 March 2003, please see link here . If you have a family-based child maintenance arrangement, then you should negotiate directly with your ex regarding what you should pay under the circumstances. You can also see the different rates here. If you are on SSP, much depends upon how likely you are to continue to be off work.
ChildSupportLaws - 28-Nov-17 @ 12:31 PM
I’ve been on ssp since September. Does being on ssp affect the amount of maintenance I have to pay. I usually pay £200 a month but my ssp only gives me £500 a month. If I was to pay the usual amount. I wouldn’t be able to afford my own rent and bills. I read something saying that while I was on ssp I would only have to pay £5 per week. What is correct as I want to make sure I do things correctly while also not leaving myself not being able to pay bills
Paul - 27-Nov-17 @ 4:45 PM
Hi, I received a £7,000 approx lump sum from work as part of a relocation package in the public interest to move establishments. This was for the purpose of vehicle purchase and not actually earnings. CMS have based my latest annual calculation on a figure that includes this payment. Although it was taxable it wasn’t earnings and doesn’t reflect what I bring home each month. Can they use this figure in their calculation?
PSW2017 - 23-Nov-17 @ 3:34 PM
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
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