[Solved] Pension Contributions and other income

Hi there

Unfortunately I don't know a great deal about the financial side of things, but hopefully someone will be along to give you some advice on this.

I do know that paying into a pension is taken into account, I think it is deducted from gross income before a calculation is made.

I've copied and pasted this from the CMS guidelines about how they calculate maintenance ....

The receiving parent (or the paying parent) can ask us to look at certain types of the paying parent’s income that are not included in the main rules we use to work out child maintenance.
This is called ‘additional income’ and can increase the paying parent’s gross income figure at Step 2.
You can apply for an ‘additional income variation’ for:
• ‘unearned’income–suchasrentalincomefrompropertyorland,or dividends and interest from savings and investments. This type of income must be at least £2,500 a year
• ‘earned’income–whenthepayingparentortheirpartnerreceives benefits and has gross income from a pension, employment or self- employment or taxable benefits (this income must be at least £100 a week)
• ‘diversion’ofincome–thisiswhenthepayingparentmaybeableto control the amount of income they receive by diverting it to another person or other purpose, which means it is not being included in the income we use to work out child maintenance.

Here's a link to the leaflet

http://www.gov.uk/government/uploads/system/uploads/attachment_data/file/85746/how-we-work-out-child-maintenance.pdf

I'm guessing this is about liability for CM via CSA.
There is no connection between your pension payments and the rental income (indeed rental income does not count as earnings from employment for pension purposes), so I'm guessing it is not your main income and that you have a salary as well. Your ability to make pension payments will be based on your income from employment (i.e. you can't make pension contributions greater than your salary). Pension contributions should be identified automatically by CSA and subtracted from your income before calculating CM liability. In practice this may well not happen and you may have to remind CSA.
The whole point of CM and pension payments are to keep the welfare budget down (which is a good thing for the state and the taxpayer, but may be a bad thing for individuals). The state wants to encourage people to save for old age by paying into pensions, so it can't really penalise fathers (almost exclusively) twice by charging them CM on their pension payments.
O

Hello Confused 2016

Child maintenance is calculated by using the paying parent's gross income, which is income before Income Tax and National Insurance are taken off, but after occupational or personal pension scheme contributions are taken away. In most cases this gross income figure comes from information given to HM Revenue & Customs (HMRC) by the paying parent, their employer or a third-party such as an accountant.

I have included a link on how the Child Maintenance Service works and how they calculate child maintenance including what they would take into consideration when calculating maintenance payments that you may find useful, https://www.gov.uk/how-child-maintenance-is-worked-out/how-the-child-maintenance-service-works-out-child-maintenance.

For more information on all the different ways to set up child maintenance and for a more personalised service, you can visit the Child Maintenance Options website at http://www.cmoptions.org.

The DWP have a sorting out separation web-app that you may find useful. It offers help and support to separating and separated families. The link is: www.dad.info/divorce-and-separation/sorting-out-separation.

Regards

William