CMS help

hi,

unfortunately yes, if you get bonus, pay rise or do overtime, then you have to pay more maintenance. if your income drops by atleast 25% then they will lower payments.

Hello,

"Current income as an employee or office-holder

38.—(1) The non-resident parent's current income as an employee or office-holder is income of a kind that would be taxable earnings within the meaning of section 10(2) of ITEPA and is to be calculated as follows.

(2) As regards any part of the non-resident parent's income that comprises salary, wages or other amounts paid periodically— 

(a)if it appears to the Secretary of State that the non-resident parent is (or is to be) paid a regular amount according to a settled pattern that is likely to continue for the foreseeable future, that part of the non-resident parent's income is to be calculated as the weekly equivalent of that amount; and

(b)if sub-paragraph (a) does not apply (for example where the non-resident parent is a seasonal worker or has working hours that follow an irregular pattern) that part of the non-resident parent's income is to be calculated as the weekly average of the amounts paid over such period preceding the effective date of the relevant calculation decision as appears to the Secretary of State to be appropriate.

(3) Where the income from the non-resident parent's present employment or office has, during the past 12 months, included bonus or commission or other amounts paid separately from, or in relation to a longer period than, the amounts referred to in paragraph (2), the amount of that income is to be calculated by aggregating those payments, dividing by 365 and multiplying by 7.

(4) Where the earnings from the non-resident parent's present employment or office have, in the past 12 months, included amounts treated as earnings under Chapters 2 to 11 of Part 3 of ITEPA (the benefits code) the non-resident parent's current income is to be taken to include the amount of those benefits as last obtained by HMRC divided by 365 and multiplied by 7.

(5) Where the non-resident parent's employer makes deductions of relievable pension contributions from the payments referred to in paragraph (2) or (3) the amount of those payments is to be calculated after those deductions".

Firstly Annual income figures are irrelivant to how they caculate liability.So get in the habbit of looking at the weekly avrage. 

Looking at the diffrence: £55,000 New figure - £42,500 Basic = £12,500 diffrence.

                                              £12,500 / 365 * 7 = £239.73 per week. (Based on the figures in your post).

The legislation above, is how things like bonuses and over time are caculated, to reach a weekly income decision. Two ways your bonus could have been taken into account in the sum. 

Under paragraph 2, a. - Im going to assume your paid monthly. They have taken the bonus figure, assumed you get this ever month and applied it as a weekly avrage of that amout. (Meaning the bonus on the payslip was just over 1k).

Or

Under Paragraph 3. - The CMS see the bonus is paid intermitently, then aggregate (Seporate out from your basic as a total). Then divide by 365 days and times by 7. (Meaning the bonus on the pay slip would likley be just over (Qaurtelry 4 times a year) (Just over 3k).

Under Paragraph 4. - Tells them to take out the Pension contributions "Relived at Source" First from basic. Then caculate the weekly income from the rest.

They have worked this out from "Pay slips". Which suggests you have provided these on request. Or as evidance of a change you submited. Or periodc current income check. (Under their guidance notes, they take the highest amount. Then caculate off of that). This is most likley because they have created a "current income" caculation to make a decision, from the pay slips. Not caculated off your last full tax year of 51k a "historic income", for what ever reason that decions was.

As exsample: if you had recived a pay rise or changed jobs to a higher amount. You are legally obligated to report this if over 25% the weekly avrage. Because, If you continued to pay based on the historical data, you would be underpaying. So at Annual review, there would be a +25% diffrence in the weekly income.

If they see a 25% diffrence they have to look at why. Then caculate according. If they see underpayment, based on the 25%. By regulation they can back date, to when they that change occured. (Your basic to historical is some like 16% on the weekly income, which also suggest this was not caculated at review, or triggerd by the 25% threshold).

They move onto a "current income figure", as a estimated guess on how much more you will earn, until review. So at review, no 25% diffrence and last historical figure becomes the defult. And most importantly, you do not build up arrears. (Although, this is an avraged caculation! so you may pay over what you caculate, as correct to historical data. But the caculation its self, is no based on that historical infomation).

The document out lineing your payments, should tell you what type of caculation you are on. "We call this......".

Now the Liability and your payments. The ratios (%) does not look right. (Unless they added arrears to your case as part of that decision). While you are understandably angry over the situation. Have you looked to see:

- Your shared care is included?

- Your pension if relived at source is included?

- Any other variriation or expences are account for?

Often, when carrying out a recaculation, these are not always automatically applied again, but I might be wrong. Always check the document in full. And check the caculations are correct to the weekly income on the document. (If its included, its included in the beack down on the document. Not on the document, not in the caculation).

I hope this help you.

Good luck.