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Hi I started paying into a pension at age 31, had my first child at 36
whats the total percentage of my gross earnings i could contribute to my employer pension scheme
cant find any guidelines anywhere...
i want to contribute 30% due to my age...
Hi there. Yeah I looked into that a while back too. I understand what you’re saying - if I jack my pension contributions way up, my income goes way down so less CM payment?…
But the CMS may decide your contributions are excessive and increase the CM payable. What’s excessive? There’s no set formula anymore so it’s down to the decision maker at CMS to determine whether or not the size of your pension contributions were specifically to avoid paying higher CM. If they decide it was then you’ll be asked to pay more CM.
The CSA used to have guidelines before it was replaced by CMS and I’m pretty sure you’d be able to argue these are reasonable.
Age Starting Pension & Reasonable Contributions:
30yrs = 12% to 18%
35yrs = 16% to 22%
40yrs = 18% to 25%
45yrs = 25% to 30%
50yrs = 30% to 45%
55yrs = 45% to 70%
So if you started at 31yrs you might struggle at 30% contribution (unless you’ve always been making 30%, in which case you could argue you haven’t increased contributions to reduce CM).
Hope that makes sense!
Hi there. Yeah I looked into that a while back too. I understand what you’re saying - if I jack my pension contributions way up, my income goes way down so less CM payment?…
But the CMS may decide your contributions are excessive and increase the CM payable. What’s excessive? There’s no set formula anymore so it’s down to the decision maker at CMS to determine whether or not the size of your pension contributions were specifically to avoid paying higher CM. If they decide it was then you’ll be asked to pay more CM.
The CSA used to have guidelines before it was replaced by CMS and I’m pretty sure you’d be able to argue these are reasonable.
Age Starting Pension & Reasonable Contributions:
30yrs = 12% to 18%
35yrs = 16% to 22%
40yrs = 18% to 25%
45yrs = 25% to 30%
50yrs = 30% to 45%
55yrs = 45% to 70%So if you started at 31yrs you might struggle at 30% contribution (unless you’ve always been making 30%, in which case you could argue you haven’t increased contributions to reduce CM).
Hope that makes sense!
I'm 43 now, can i contribute 25%?
@mr_goldmine as long as they don't think your contributions are excessive, you should be fine.
Hi Mr Goldmine - like Bill337 said, as long as they don’t think your contributions are excessive.
If you’re already paying your ex due to an ongoing CMS case (as your child must be 7-8yrs old), then trying to change your contributions now (to reduce CM) will be more difficult.
In the table above, those percentages were for when you first started contributing to a pension (not how are old you are now).
If you have an ongoing CMS case and then increase your pension contributions resulting in a drop in CM then you risk the non paying parent asking for a review. If CMS review and discover the amount of CM in has dropped because your pension contributions have risen (and those contributions are deemed ‘excessive’) then CMS can ask you to pay more CM
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