CMS guidance states that they use net income after any personal pension contributions so does anyone know what they do if you pay all your net income from your own limited company into a personal pension? Obviously this would only be possible if living with someone whose paying the daily living costs of food and utilities etc.
Alternatively if the company pays direct to a pension scheme so no income is received at all, how do CMS treat that?
The above probably falls into the CMS category of "diversion income" and I'd be interested if anyone knows how CMS treat this please.
hi,
If your paying 100% of income into a pension then CMS will almost certainly treat that as diversion of income. they will likely investigate your companies finances, which would be stressful. There is information here about what amounts to reasonable pension contributions, page 8:
https://voiceofthechild.org.uk/wp-content/uploads/2017/11/Diversion-of-Income.pdf
This is a long time ago (almost 20 years ago now thinking about it) and under CSA, prior to CMS, but my ex wife at the time paid 100% of her income into pension to try to avoid paying me any maintenance. She set up the new pension within a couple of days of me opening a case with CSA, so I went to a tribunal. I was expecting them to allow her somewhere around 20% of pension, but because they saw it solely as a way to try to avoid paying me maintenance, they disregarded the whole of the pension amount, so she was assessed on her full income. The tribunals do not like people trying to play the system to avoid paying maintenance.