Ex Diversion of Income through pension and Salary Sacrifice

starsandbutterflys · 25 March 2017 at 2:27PM

Hi All,

My ex is a financial advisor very shrewd about his pension.

The last five years or so my Child Maintenance has reduced further (by £100 2 years ago, then an further £100 recently).

I am convinced he is purposefully reducing his relevant earnings through salary sacrifice but the CSA (and now the CMS) don't seem equipped to be able to investigate this or get their heads around. I worked out the earnings they are using are the same as mine. There's no way he's earning the same as I do: this would mean his earnings would have more than halved from 10 years ago, and he is now at a much high-level in his job. So I'm sure he's diverting income through salary sacrifice - as theres no cap on how much you can put into your pension or do salary sacrifice is there anything I can do..? I

Is there anyone in the same situation as me? I am raising our child on a single household income working full time - he has 2 incomes in his household and is supporting his new part-time working partner and their new child: I feel like I am subsidising them and my child is being shortchanged not only finically but also because I have to work long hours to support my son.

Anyone else in a similar situation re the salary sacrifice?

Thanks

HoneyNutLoop · 25 March 2017 at 6:39PM

You can apply for a variation under the diversion of income ground.

This is the law governing that variation ground:
http://www.legislation.gov.uk/uksi/2012/2677/regulation/71/made

Applying for a variation does not automatically mean one will be awarded. They will consider the information and evidence that you and the other parent provide in relation to the variation before making a decision.

freebiequeen · 4 April 2017 at 11:29PM

starsandbutterflys wrote: »

Hi All,

My ex is a financial advisor very shrewd about his pension.

The last five years or so my Child Maintenance has reduced further (by £100 2 years ago, then an further £100 recently).

I am convinced he is purposefully reducing his relevant earnings through salary sacrifice but the CSA (and now the CMS) don't seem equipped to be able to investigate this or get their heads around. I worked out the earnings they are using are the same as mine. There's no way he's earning the same as I do: this would mean his earnings would have more than halved from 10 years ago, and he is now at a much high-level in his job. So I'm sure he's diverting income through salary sacrifice - as theres no cap on how much you can put into your pension or do salary sacrifice is there anything I can do..? I

Is there anyone in the same situation as me? I am raising our child on a single household income working full time - he has 2 incomes in his household and is supporting his new part-time working partner and their new child: I feel like I am subsidising them and my child is being shortchanged not only finically but also because I have to work long hours to support my son.

Anyone else in a similar situation re the salary sacrifice?

Thanks

I'm in the same position, unfortunately. My child support payments halved this year, as the NRP has produced wage slips showing that his income has reduced by half.

In my view, this is a deliberate strategy to reduce his child support liabilities and should not be permissible. Effectively, I am funding his pension.

daddydodo · 5 April 2017 at 3:49PM

starsandbutterflys wrote: »

Hi All,

I am convinced he is purposefully reducing his relevant earnings through salary sacrifice but the CSA (and now the CMS) don't seem equipped to be able to investigate this or get their heads around.

The way to reduce maintainance payments through CMS is to increase pension contributions. Salary sacrifice does not count as a valid reduction. Don't forget the CMS payment is calculated as 'Gross pay - pension'. Unless it is referenced as 'pension' on his payslip then it does not count in the CMS calculation. However if your ex is still with the CSA scheme AND paying pension through salary sacrifice he will be in for a huge shock when it transfers to the CMS as the figures they use will have no reduction for his pension contribution.

starsandbutterflys wrote: »

Is there anyone in the same situation as me? I am raising our child on a single household income working full time - he has 2 incomes in his household and is supporting his new part-time working partner and their new child.

When did his latest reduction in payment occur? Did it coincide with his new baby....?

Sambella · 6 April 2017 at 11:24PM

I don't see why an NRP can't do this with his pension contributions . Especially if he has started a new pension if his ex was given a portion of his pension via divorce.

A married man with kids can do it

Women can.

And so can people on tax credits !!!! for the tax advantages it brings.

https://www.linkedin.com/pulse/saving-pension-while-getting-universal-credit-63-subsidy-morgan

FBaby · 15 April 2017 at 5:09PM

There is a difference between an nrp on a good income reducing maintenance payment with pension contribution so that he still pays a reasonable amount for one child rather than paying way above it and therefore contributing to the pwc household rather than the child and one who does it to pay nothing or next to nothing.

Kris007_2 · 2 October 2017 at 4:32PM

I've just taken my ex to court in Glasgow over this on Friday. He diverted £20k of his £57k income into a private and company pension scheme which reduced the maintenance to his two children by £300 per month. When I divorced him for adultery and neglect I stupidly never took alimony from him as I thought I could support myself on my job plus the maintenance, plus I never thought he would be the type to do this to his kids.

I asked for a 'variation of income' which is where the CMS basically look at it twice, as he is legally allowed to divert up to, I think, 40%. This goes back and forward twice and then you get to court. This is a man who in 35 years of work has never paid any AVC (additional voluntary contributions) into his pension. However he has a holiday lifestyle to maintain so his children and I suffer, me, because I'm then scrambling for more work to keep the kids fed and in their own home. This law was implemented years ago when people could retire at 55. Halfway through my wait for court the CMS found another £6k income he hadn't let them know about so the whole process had to stop and restart, as the calculation would then be different! I waited 15 months in total to get to court.

The judge claimed because he now had an income of £37k and a mortgage, to ask him to pay another £300 wasn't fair. I have the same mortgage as him to pay monthly, he has cash in the bank and 5 holidays a year. I understand the judge's hands were tied too as the law is the law but it an absolute joke. I asked the Scottish government to look into it but its a Westminster ruling so am now chasing them to change the law.

I appreciate men (and woman) might want to put large deposits into their pension but surely their children's responsibilities come first?

In your case I bet he claims he now pays for the new child and he's diverted money into his pension.

The outcome of mine is that he might have money for his international fishing holidays but he has no respect from 2 children whose afterschool clubs and outings have had to go, to be replaced by food on the table.

There's been a few articles on this subject but the law needs looked at rapidly, most people just give up chasing it.

Ex Diversion of Income through pension and Salary Sacrifice

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