Home > Earnings & Deductions > What Counts as Earnings?

What Counts as Earnings?

By: Lorna Elliott LLB (hons), Barrister - Updated: 3 Mar 2024 |
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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If I cash in my whole pension will this count as income? And money deducted for CSA. If I only cash in the 25% tax free will this count as income and money deducted for CSA? Regards.
Matt - 3-Mar-24 @ 10:09 AM
No asking anything on here as clearly its a site with lots of questions but no knowledge from this lot to answer any of them, pointless site.
, - 7-Feb-24 @ 10:16 PM
This website seems to be pointless, as none of the questions seem to be answered.It has probably been devised by a bunch of sadist misandrists.Worthless - no real advice of substance or value on here, at all.I would advise you all to look elsewhere.
Dave H - 27-Sep-21 @ 9:09 PM
Hi, As a UK resident and paying my tax and national insurance in the uk. Does my shares i hold in the US get factored in when calculating my child maintenance payments, even though I pay the tax on my shares in the US and not the UK?
Pk - 7-Sep-21 @ 3:52 PM
I split with my child father, he work pt but also at university which he get money from. When working out how much he has to pay for child does he include the university grant as its a income still or not ?
Me - 9-Jun-21 @ 8:09 PM
I make regular CSA payments and have no arrears. If I receive a lump sum pension payment into my bank account, will the CSA treat this as income and increase my CSA payments.
DL - 3-Apr-21 @ 1:07 PM
where are the answers to theses questions? is this just a money making scam like the divorce lawyers and barristers ?
why - 28-Mar-21 @ 4:50 PM
I am curious, I am about to be medically discharged from the military, at the end I will receive a lump sum from my pension. Will the CSA take a percentage of that, or because it is a redundancy/medical release from service will this be left alone?
SH - 3-Feb-21 @ 9:54 PM
I have been reading a lot of messages regarding how CMS has calculated their monthly payment. One point I would like to raise to CMS on is that fact they taken into consideration our gross amount and not your net. Unfortunately we have to pay taxes and I don't believe it is right they are not taking this into consideration. When I raised this point I was referred to my MP, can any one help me understand why this is the case. Thanks
FS - 16-Dec-20 @ 4:05 PM
Hi, I have read in the above information that CMS is calculated on a wage AFTER tax, NI and pension is taken. I have spoken with CMS themselves but they have stated the calculation is done BEFORE deductions. Can anybody confirm this please. Thanks
Ste - 15-Dec-20 @ 6:00 PM
I’m in the military. I pay Cms. My question is, when I am away I get paid LSA, which is an allowance I get from being away from home. Also I have been deployed for 6 months and I will be entitled to an ops bonus, which is basically a tax rebate. Are these payments something the receiving mother would be entitled to. ? As I don’t think it is right. I’m divorced with clean break.Should she only be entitled to my monthly wage. Any help will be appreciated.
Jr44 - 31-Oct-20 @ 5:06 AM
Voluntary Redundancy is being offered at work and i'm considering, knowing that i only have 4 years before i can retire. Would this be classed as an income? Would the calculation be salary earned to date plus the Redundancy, to then form the new payments i would be expected to make even though i have no intention of working once redundant.
YellowDemon - 14-Aug-20 @ 11:10 AM
hi, I have a personal pension pot which I want to use to buy my retirement home. I stopped paying into the fund 5 years before I met my ex wife. I pay regular maintenancethrough cms and they said as I'd pay tax when I cash the fund in my payments would go up. Yet I won't even be earning anywhere near what I earn now, so where does this leave me??
wardy - 8-Aug-20 @ 1:47 PM
Hello. I'm currently receiving benefits from which my child maintenance payments are automatically deducted. However, I will be retiring soon, and taking my work pension which gives me a tax-free lump sum, plus an annual amount which is taxable. My question is whether or not my ex-partner is entitled to any of the lump sum? I know I will have to pay from my taxable annual income, but I'm not sure about the lump sum.
Storm - 29-Jul-20 @ 12:23 AM
Hi, i was wondering if someonecould clear this up for me. I’m currently employed and pay regular child maintenance. I also make money from online gambling. For example . If I generate let’s say £100,000 per year gambling would I pay child support from this ? As it’s none taxable and it’s classed as winning money but not aGuaranteed income.
Jonoo - 10-May-20 @ 6:18 PM
Hi all does anyone know if the lump pension sum paid when leaving the military is counted in that years child maintenance payment calculation?
Concerned - 1-May-20 @ 6:00 PM
Is an NHS illhealth retirement pension classed as earnings and therefore mean You have to pay CMA out of it ??
Concerned relative - 29-Jan-20 @ 10:05 PM
I am looking at retirement this xmas and taking my pension, what can the CSA now take from me if anything. My pension will be less than the tax threshold, I will be hoping to take a cash lump sum to invest for some money also, can anyone help clarify this please.
Andy - 18-Nov-19 @ 1:53 PM
I am contacting you for some advice on behalf of my son. He feels that he has exhausted all avenues of assistance and I am concerned for his mental health. My son is separated from the mother of his children and she has arranged for child maintenance payments to be taken direct from his salary via CMS. He has two children and his earnings are approximately £260 per week before deductions so was expecting to pay around £42 per week in maintenance (20% of his salary). His deductions have been calculated at £104 per week (40% of his salary) as his ex partner has stated that he has not paid anything for the children since they separated about a year ago. This is despite that fact that he was giving her payments in cash of between £30 and £50 per week depending on what he was earning and what outgoings he had. Unfortunately as this was in cash he has no proof that payments were made and so CMS have calculated that he owes a significant amount of arrears. This level of deduction is causing him severe financial hardship as he is paying £80 per week towards shared living costs to his new girlfriends mother as well as trying to run a car, pay for a mobile phone etc. He has tried contacting CMS via his local MP, contacting them directly and asking his employers HR/wages department for help but to no avail. Is there any way that the percentage amount being deducted can be reduced to a more reasonable amount while still paying off the supposed arrears?
ConcernedDad - 3-Nov-19 @ 6:46 PM
Hi all,I receive an army pension(not a war or medical pension),my question is,is it classed as an income for child maintenance service? It is my only income as I'm a stay at home dad to my children I have with my 2nd wife,I'm asking as when claiming child tax credits recently they said I had been declaring my army pension and did not need too,confusing as they both government run. I'm thinking it is right but any info would be appreciated Many thanks.
Mr56 - 27-Jul-19 @ 8:16 PM
I need help please. what counts as earnings on a limited companies balance sheet accounts as its the only info that I can see on companies house? I can see drawn downs of 77,000 and dividends paid of 50,000 year ended Jan 2019. Is there still this loophole in the law for these Exes to get away with paying CSA or has it been closed?
Lost son - 9-Jun-19 @ 10:51 PM
Hi My sons mother complained to child maintenance about the amount she was getting she said hes on a 1000£ a week and drives a Mercedes so they got my p60 that started my earnings before tax was around 40 of thousand and are taking 148£ a week, I went against this and said you haven't take into account I get 200£ tax free lodge and I get 220£ tax free travel every 4 weeks so they said because that doesn't take you over the 25% legislation we cant look at it but the got the amount wrong in the first place, is this correct, surely they got it wrong first but when taken into account my lodge and travel it doesnt take it over 25% so no we are charging you on the lodge and travel? That's wrong isn't it, I also have a cout order that cost me over 5000 to get access it states that I get him for 38 nights a year but I can have him more and I do have him alot more and takes me over 52 nights a year but because she said no he doesnt that's it I cant get shared care reductions and I have to pay again in court to get it changed. This is ruining my life and career
Jonlee - 21-May-19 @ 1:23 PM
I have ran my own business for many years paying correct maintenance for three children. My business is closing down this year and my only income will be £625/mth rental profit. I am fortunate to have a father who wishes to pay me an allowance each month of £600 out of his excess income which attracts no income tax. Does this count as income regarding CMS?
Hartley - 4-May-19 @ 1:17 PM
Child maintenance are currently looking at my husband's income, he hasn't worked since 2013 due to disability, when we married 2015 he stopped getting money from ESA as I work over 24 hours per week, he does get low rate PIP. child maintenance said they cannot take money from PIP, only taxable benefits, they have said my husband earns £10.71 per week and has to pay £7 per week, the claim started February 2019, child maintenance said on HMRC the only income they can find is from April 2014 - April 2015 and that's what they've used to calculate weekly payments, we're very confused as the claim only started Feb 2019 and we thought they should use your current earnings not 4-5 years ago.
Julz1303 - 1-May-19 @ 10:01 PM
Is a compensation award classed as income and does maintenance have to be paid from it. I need this award now as I can’t work full time and l also can’t claim benefits. Don’t qualify as I can possibly do ‘some work’...
What the heck? - 4-Apr-19 @ 10:57 AM
how come the gov website says the oppisate when calculating your payments, as in it states your earnings are before tax and national insurance,?
mike - 3-Apr-19 @ 11:16 AM
Why does the CSA yearly review ask about pension payments? I just started a new job last year and I pay into an occupational pension scheme. Thanks
Stevie - 30-Mar-19 @ 2:38 PM
My ex wife signed a separation agreement, stating that she would not make a claim for my armed forces pension if I left her the house. She has now sold the house (£90,000 profit) and low and behold has now made an application to the CMS. They have calculated my pension into my payments, even though they have a copy of the minute agreement. This seems very wrong to me, is there anything that I can do?
Troy - 27-Mar-19 @ 7:39 PM
My ex husband earns a basic salary of £17,00”, with commission each month , last tax year he earns £27,000., previous year £26,000. So I’m presuming approx the same this year. Is commission taken into account when the csa work out maintenance payments? We have 3 children, thecare with me most of the time and approx 2 nights a week with dad. Thankyou
marsha47 - 14-Mar-19 @ 9:36 AM
My ex receives an injury on duty police pension of £2,900 a month nett. Child Maintenance has been calculated at £34 a week for 2 teenagers. This is only 5% of his take home pension. He has a nice life not working and goes on holiday to France skiing and to America a few times a year whilst I’m struggling financially supporting the kids (they live with me full time tho he does see them) and I work full time. How is this calculation proportionate, fair or right?
Parks - 8-Mar-19 @ 6:39 AM
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