Putting 90% of wages in pension to avoid CSA?

Stan_Here

Is this a divorced couple or separated? If divorced, the value of the pension is taken into account in the settlement, and also there are rights for the other party to have a part of the pension legally separated/reserved for her (its usually the mans pension but it works either way).

What this means is that all the money being salted away, is only going to increase the pension for the partner in the long run. Even if only separated, the growing pension pot will eventually go under this type of arrangement so perhaps if this is pointed out, the ultimate futility of this may dawn on him.

Either way, the money is needed now to support his kids, and he should be ashamed of himself for this neglect. Perhaps the arrangements require him to support his partner/wife and it is this that he is trying to avoid. No excuse for neglecting to support his kids though - for any reason, ever.

danielanthony

Erm, perhaps he needs the money to support himself? Perhaps she has left him paying large debts and can't afford what the CSA would make him pay as they take no account of debt repayments.

Agreed, both parents should contribute to the raising of the children but not all the circumstances about this particular case are known.

Marisco

Maybe he has a partner who earns good money, so he doesn't need his to live on? I don't think it's right NPR's can do this though, but I don't think it's right that overtime is taken into account for assessment either. Maybe if they weren't going to count his overtime, he wouldn't have to resort to these sort of tactics.

HoneyNutLoop

Hi,
The initial calculation would be based on the net income left after the 90% pension deduction but the PWC can apply for a variation under diversion of income. (regulation 19 of the Child Support (Variations) Regulations 2000). Whether or not a variation would be awarded is based on many factors - you or your friend may want to consider the handful of Commissioner's decisions on the topic, the most recent of which I could find was CCS 648 2009.

So, potentially, your friend may initially see his payments go down, but then go right back up with backdating, as another poster has said if a variation was awarded. He would then have to pay the new increased payments and arrears for the backdating.

In short, this could turn out to be a very Baldrick style masterplan that backfires badly.

Fission

WYSPECIAL wrote: »

Actually its perfectly legal and doesn't need to fool the CSA. He may be questioned as to how he is supporting himself and they may try to apply a variation for diversion of income but if he appeals he will win a tribunal.

No, he will certainly not. The law was changed a few years ago so as to combat that very sort of obvious abuse. Of course, the PWC would need to apply for a Variation to have the money taken into account, and if refused, would have to appeal to a tribunal. After that, it'd be plain sailing (for her and the children).

F

WYSPECIAL

Fission wrote: »

No, he will certainly not. The law was changed a few years ago so as to combat that very sort of obvious abuse. Of course, the PWC would need to apply for a Variation to have the money taken into account, and if refused, would have to appeal to a tribunal. After that, it'd be plain sailing (for her and the children).

F

Happy to be corrected if the law has changed but could you point us in the direction of the legislation? Unless the law actually states a percentage or cash figure then it is open to appeal and the onus would be on the applicant to provide proof.

Say for example a NRP has a new family with a partner who earns £50k a year. They look after the kids but work part time and earn £50 a week. Legally they can pay all of that into a pension scheme. There is still plenty to live on from the £50k salary.

It may be morally wrong but I can't find any legislation to show that it is legally wrong.

I am aware that in CS3 they are looking at allowing 15% maximum deductions for pension but they don't seem to have decided what it is 15%. Is it only earned income, tax credits or maintenance received for children?

Fission

WYSPECIAL wrote: »

Happy to be corrected if the law has changed but could you point us in the direction of the legislation? Unless the law actually states a percentage or cash figure then it is open to appeal and the onus would be on the applicant to provide proof.

The person assessing the case and eventually, a tribunal, have to make that judgment.

URL: <http://www.familylaw.co.uk/system/uploads/attachments/0000/1412/si20090736.pdf&gt;

Relevant text:

(3) In regulation 19 of the Variations Regulations (income not taken into account and diversion of income), for paragraph (4) substitute—
“(4) A case shall constitute a case for the purposes of paragraph 4(1) of Schedule 4B to the Act where—
(a) the non-resident parent (“P”) has the ability to control the amount of income that—
(i) P receives, or
(ii) is taken into account as P’s net weekly income,
including earnings from employment or self-employment, whether or not the whole of that income is derived from the company or business from which those earnings are derived; and
(b) the Commission is satisfied that P has unreasonably reduced the amount of P’s income which would otherwise fall to be taken into account under the Maintenance Calculations and Special Cases Regulations or paragraph (1A) by diverting it to other persons or for purposes other than the provision of such income for P.
(4A) In paragraph (4), “net weekly income” has the same meaning as in the Maintenance Calculations and Special Cases Regulations.”.

WYSPECIAL

Thanks but that isn't a law. Are you aware of an actual legal limit either % or £ that has been introduced? There is talk of 15% in CS3 but I don't think it has actually been passed.

I agree with you that 90% is likely to be seen as unreasonable in the majority of cases but what say of the difference between 15% and 16%? Also not many people could do without 90% of their income for any length of time, In fact it could be argued that any payments to a pension scheme are diversion of income as they are not compulsory.

Fission

WYSPECIAL wrote: »

Thanks but that isn't a law.

Wrong.

It is the amendment regulation which amends (among other things) Regulation 19 of the Variation Regulations. The same statutory regulation contained a regulation which amends the analagous regulation within the Departure Regulations for the older rules.

HTH

WYSPECIAL

Fission wrote: »

Wrong.

It is the amendment regulation which amends (among other things) Regulation 19 of the Variation Regulations. The same statutory regulation contained a regulation which amends the analagous regulation within the Departure Regulations for the older rules.

HTH

Cheers,

Are you aware of any precedents set as to % or amounts as obviously with these regulations each case would be an individual judgement call? I must admit I thought the Variation/Departure regulations were not law but were there to allow a more common sense interpretation of the actual child support acts to allow common sense and fairness into the equation.