TOPIC: Child maintenance

Child maintenance 1 month 1 week ago #111818

Hello

Just a couple of questions

Can my ex (the recipient) see what I earn overall- or just after pension contributions, and how much I may contribute towards my pension ?

Just something I’ve been wondering

I’m about to receive a pay rise which will increase my income by 34%, and I’m playing with some figures to see if I can increase my contributions to so I don’t have to have a re assessment following a change that would be a 25% difference.
I don’t want to be seen just for trying to dodge paying more to her, if I’m getting such a big pay difference it’s common sense that I should increase my contributions for my own benefit . I worked out I would have to increase my contributions from 6%, to 19% to stop a real assessment (my annual is due anytime also and will be based on last years P60)

From what I’ve seen I’m sure 19% is ok, it’s not unreasonable?

But I just don’t know if the recipient can see that sort of info, or just the amount worked out after contributions?

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Child maintenance 1 month 1 week ago #111820

Jonathan, I have previously posted on this matter, if he CMS, or your ex feels that this is a diversion of income, it would be under S71 of the act, where the "average" acceptable percentage is 12%

However, and a massive however, is the 2 court cases and the ruling of the judge, to what the case worker would need to take into account by individual, so your age, when your expect to retire and how long you have been paying

I am 54 and will be increasing my contributions to 45%, this is just within the guidelines that are available under the freedom of information request, based on when you started paying and when you want to retire

there is also a further table the CMS work to, which is the estimated pot available, when you retire based on your contributions, if you earn over £50K, 50% of your salary is acceptable

good luck
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Child maintenance 1 month 1 week ago #111821

Thank you for your reply, that was helpful

I’m 38, so I don’t feel 19% is unreasonable really. Based on an online calculator I’m still way off from having a comfortable income based on that

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Child maintenance 1 month 1 week ago #111823

Jonathan, the internal document that the CMS use as a means of calculating pension payments, which they really do not want you to see, based on 35 only just really starting a pension the rule is up to 22% and 40 to 45 the rate is 25 to 30%, which does not put you in contravention of rule S71 which is the diversion of income

The above scale is used internally by the CMS so don't let a case worker fob you off and refer to this information supplied by the FSA

A further scale is based on your contributions what is the expected pot you will have based on your present earnings

I am doing this not to avoid paying for my child the payments he will still get over 300 per month but to allow me to have some life when I retire

The CMS and unfair ways of calculating income leave some with no alternative

Good luck
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Child maintenance 1 month 1 week ago #111862

Simple question, but just checking -

If someone earns 40k salary and 30k self employed. ( Total 70k income)
Pays 30k in to a pension ( Age over 50 )

The income that CMS would calculate on is 40k ?
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Child maintenance 1 month 1 week ago #111865

Mwall66 - thank you again!
That’s some good info, do you have a way that I can see this internal document that they use as a guide to fall back on should I face any resistance?

I agree with you, it’s not just about having avoiding paying for your children, we have to make sure we are financially secure in retirement also. But of course - if I’m going to be getting paid an extra X amount a year, I would rather not pay as much to the ex if I can help it. The extra income is money that I’m not use to, so I can manage without it can’t I?
When you think about it saving an extra £100 into a pension gives you an extra 20% tax, and keeps 15-19% of that from going the ex.
It’s probably the most efficient way to invest

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Child maintenance 1 month 1 week ago #111866

Sirius, I agree that it would be the amount you quoted (40k) which is the taxable income after pension contributions

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Child maintenance 1 month 1 week ago #111867

Mwall66

Just a quick question

The contributions for example, does that include the % your employer pays in also?
Like say I pay 19%, employer pays 6%? To make the 25%
Or is it just my contributions that are considered?

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Child maintenance 1 month 1 week ago #111869

when you discuss the issue of pension contributions, the case worker will have certain internal documents, which they need to refer to, to make the decision, if you are possibly diverting income, in breach of S71. There is a clear guidance note "Remember, it is perfectly acceptable for a non-resident parent to make high pension contributions. The non-resident parent may not consider this unreasonable and it may not be intended to deliberately reduce their child maintenance". "you are not sating the non-resident parent cannot use their income in any manner that they choose, but where this affects the ability to support their children, we may need to take into account. There is no formal limit on the level of your salary you can contribute, there is of course the £40K relief maximum, but you can use the previous 3 years unused amounts

So this not the resident parent requesting a variation of your contributions, this is you increasing your contributions and may have to discuss with the case worker, (I would assume that you would simply use the case law and internal documents that you refer to with the case worker, should you need to defend a request for a variation from the resident parent)

The sliding scale that CMS need to refer to, is the old FSA, which is still used, as one of the tools they have to look at your payments.
age 30 12-18% of income
age 35 16-22%
age 40 18-25%
age 45 25-30%
age 50 30-45%
age 55 45-70%

There is also a scale that is your anticipated level of pension, based on your contributions, the on-line pension tools will do this for you, but it is based on your present salary and the acceptable percentage you will have when you retire. For a £50K plus, this is 50%, so you will be paying a lot if starting late, to get anywhere near this figure

The employee contributions can be a factor, but I have just gone with the "gross taxable figure", that CMS can see on your payslip and will cross that bridge if questioned
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Child maintenance 1 month 1 week ago #111870

further comment on this, I agree, I am not looking to simply reduce the payments, but the scandalous way the CMS are allowed to calculate your payments, gross income, benefit in kind of a company car as income etc etc, dictates that you need to also plan for your retirement, the CMS do not agree, but people split, mostly for the right reasons and live does go on

The judge in summing up his decision, on the relevant case law, was clear that a number of factors will need to be taken into account, when deciding if increased payments into a pension are a diversion of income under S71

Age you expect to retire
Health issues that may dictate you retiring earlier
Professional advice you have received on your pension and contributions
How mush you have historically paid

It is not black and white, the 12% starting point is for a young man in his early 30's, the scale increases in your contributions as you get older, refer to the FSA scale
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Child maintenance 1 month 1 week ago #111872

Mwall66

Thank you again for your info I find it very helpful.

Oh, I do have one question:

Can my ex for example, see how much I earn as a ‘whole’ before my pension contributions?
On the letter I receive on my annual review, it just states the gross weekly amount after the pension deduction over a year. It does not tell me what pension I’ve paid as it just states the gross amount.

I just wondered if my ex is privy to that information.

I feel uncomfortable her knowing anything about me, especially my financial situation

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Child maintenance 1 month 1 week ago #111875

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I don't believe they do reveal this, certainly they didn't used to in the days of the CSA, they simply gave the calculated figure, which you can work back to a gross, but that is after pension deduction.

If she goes for a variation, you may have to reveal more detail in that case.

However, if you are putting a large (but legal) amount aside for pension, if she does find out how much, that information is going to annoy her far more than you.

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