Home > Earnings & Deductions > What Counts as Earnings?

What Counts as Earnings?

By: Lorna Elliott LLB (hons), Barrister - Updated: 25 Mar 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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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
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
Jj - 18-Jan-17 @ 2:23 PM
Tiss - Your Question:
Hi My ex husband has now retired as a police officer with a good pension and a monthly wage. he's just halved my maintenance payment so I have gone through csa. will they take into account his pension and his monthly salary

Our Response:
Yes, any money which is taxable via the HMRC is considered 'income' and therefore will be assessed by the CMS.
ChildSupportLaws - 18-Jan-17 @ 11:30 AM
Hi My ex husband has now retired as a police officer with a good pension and a monthly wage .... he's just halved my maintenance payment so I have gone through csa ...... will they take into account his pension and his monthly salary
Tiss - 17-Jan-17 @ 3:06 PM
S2016 - Your Question:
HiI am currently employed but not receiving any salary as I have been off sick. I have received pay until Dec 2016 and have been paying my child maintenance, however I am not being paid anymore and cannot afford to pay my child maintenance at the moment. I spoke to child maintenance services and they said I have to give them 12 weeks notice and I still need to pay them in the interim, can you please help as this is not possible at the moment?Thank you

Our Response:
I'm afraid we do not know the administrative timescales of the CMS. However, if you think a change in your circumstances could affect the amount of child maintenance you pay or receive you should let the CMS know. The link herehighlights these. However, if you have been ill and you could not give notice (as you did not know when you would be returning to work), and you think you have been treated unfairly, you can complain. Please see link here.
ChildSupportLaws - 17-Jan-17 @ 11:13 AM
Hi I am currently employed but not receiving any salary as I have been off sick. I have received pay until Dec 2016 and have been paying my child maintenance, however I am not being paid anymore and cannot afford to pay my child maintenance at the moment. I spoke to child maintenance services and they said i have to give them 12 weeks notice and I still need to pay them in the interim, can you please help as this is not possible at the moment? Thank you
S2016 - 16-Jan-17 @ 12:00 PM
I have my child support stopped from my wages every month I've since been ill and have been of work and claiming sspchild support take this money and leave me with nothing I have no rent money or able to pay my bills I rang them and they told me its legal they can do it any helpful answers please
Fool - 9-Jan-17 @ 3:53 PM
Hi, Reading the article above it states that earnings are funds taken into account after deductions via CSA. The new Child maintenance Service (CMS) take the Gross salary into account and will not entertain deductions. By the time my husbands deductions have come off his salary he is around £1000 per month less yet the CMS system won't take that into account and he is still expected to pay an amount based on his gross even though he has a new baby at home to consider. How is that a fair system? And just to be clear, my husband has had a family based arrangement for over 7 years, always has his children and never missed a payment but his Ex wife had another baby to another partner then used the CMS service by lying and stating my husband never pays. We have years of proof of payment & sleeping rota arrangements and they just wouldn't accept it as evidence. It's like he is now being punished for making an amicable paying arrangement with is ex and not involving legal processes. I'm at my wits end and keep going round in circles with this service trying to get a fair decision. Help!!
Frustrated - 3-Jan-17 @ 7:31 PM
I have a jobs need company car. My company lease it and I pay tax and private mileage costs on it. It is shown on my payslip as a notional payment but isn't included in my salary figures. My company say it is not part of my salary, it is required for the job I do. Is it right that either the old CSA system or the new CMS system would use this in their calculations.. I don't benefit one penny from the car and I don't get to choose if I want it or not, it's not something I could refuse in exchange for extra money?? Please help me understand.
guddad - 2-Jan-17 @ 5:40 PM
Mia - Your Question:
My ex-husband has just reached pensionable age and is now in receipt of a state pension. I have been informed by Child Maintenance that he will now only pay £20 per month for our two children - how can this be right when he continues to work in full time employment and earns £40k per year and has an additional private pension of £7k per year?

Our Response:
If your ex is still earning and paying tax on those earnings, then these will be taken into consideration. If you feel you are being treated unfairly, please see gov.uk link here .
ChildSupportLaws - 20-Dec-16 @ 11:30 AM
My ex-husband has just reached pensionable age and is now in receipt of a state pension. I have been informed by Child Maintenance that he will now only pay £20 per month for our two children - how can this be right when he continues to work in full time employment and earns £40k per year and has an additional private pension of £7k per year?
Mia - 19-Dec-16 @ 8:12 PM
BB - Your Question:
HI. I'm in the fire service and looking to retire in the next 3 yrs. I pay the basic 15% child maintenance for a daughter I've never seen. When I retire do I still have to.pay that 15% from my pension. Also am I legally bound to pay any amount from the lump sum I will receive on the day I retire. Thanking you in advance. BB.

Our Response:
Child maintenance is based purely on taxable earnings, so if your lump sum is tax free, then you would be exempt. However, if your pension is occupational and taxable, then you would be assessed for child mainetnance payments on the amount of pension you are earning.
ChildSupportLaws - 8-Dec-16 @ 12:11 PM
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