CMS & Pension contributions

cfpcjls

Hoping someone can help.

Paying parent been assessed as a new case with CMS on 2013-2014 tax year - worked full time. Was made redundant and subsequently has been in a part-time job for 10 months. The gross weekly income (before pension/NI/tax deductions) from this part-time job is 24.7% less than his previous wage. He pays in to an occupational pension scheme (public sector pension scheme), which reduces his gross weekly income (before NI/tax) to 28% less than his previous income. Therefore, my interpretation is that he should be assessed under current income.

He can provide evidence of wage slips showing the same income & deductions for 10 months. He can provide a P45s & a P60 for 2015-2016 showing a gross annual income of 60% of what he has been assessed on, as he was on JSA for part of that tax year.

He is applying for a mandatory reconsideration on the basis his income is greater than 25% different, and the caseworker refused to accept his pension deductions. as they said that not all occupational pension schemes are considered for deduction, in their assessment calculations.

I have read through the CMS statutory instrument/legislation, and subsequently the 2004 FInance Act for elaboration of the term "relievable pension contributions".

Does anyone know what pension schemes are disregarded by the CMS for the purposes of reducing gross weekly income?

This isn't about avoiding paying child maintenance - it's about paying the right amount. He's never missed a payment.

HoneyNutLoop

CMS look at gross taxable income. When you look at his payslips, does his gross taxable pay for the pay period reflect his gross pay minus pensions contributions?

I.e. Gross pay £200, pension contributions £20, gross taxable pay shown on payslip = £180.

cfpcjls

Yes, his wage slip shows gross pay, and the NI deduction, tax deduction and the pension payment. Apparently they don't accept some occupational pension schemes though.

HoneyNutLoop

If you're moving from historic income (the figure provided by HMRC) to current income (the figure based on the payslips you provide) reg 38(5) of the Child Support (Child Support Maintenance) Calculation Regulations 2012 says the following in respect of pension contributions:
(5) Where the non-resident parent’s employer makes deductions of relievable pension contributions from the payments referred to in paragraph (2) or (3) the amount of those payments is to be calculated after those deductions.

I would go back to them and try to find out more info about what pension contributions they think they don't take into account. The main thing is that the pension contributions must be "relievable" I.e. Eligible for tax relief. So long as you have checked yours are, they should be eligible.

The only other thing I can think of is that wires have been crossed, as there is a different regulation for taking account of private pension contributions as a deduction from historic income:
(3) Where the non-resident parent has made relievable pension contributions during the tax year to which the HMRC figure relates and those contributions have not been deducted under net pay arrangements, the HMRC figure is, if the non-resident parent so requests and provides such information as the Secretary of State requires, to be adjusted by deducting the amount of those contributions.

However, that doesn't account for the "we only take account of certain types of occupational pension contributions" stance. I think you're only avenue is to go back to them for clarification.

NYM

Step 2 – Things that affect income

A paying parent’s gross income at Step 1 can be adjusted if certain
things apply that we can take into account.

Payments into a pension scheme made by a paying parent The amount of gross weekly income at Step 1 is reduced if a paying parent pays contributions into a private pension scheme.

For example, if a paying parent has gross income of £300 a week at Step 1 but pays private pension contributions of £20 a week, the amount of gross income we now take into account is £280 a week.
Remember that contributions to an occupational or employer pension scheme by deductions from pay are usually made by an employer. If this is the case, we will have already taken these into account in Step 1 and the paying parent does not need to tell us about them. But a paying parent can tell us if they pay their contributions in another way – for example, direct to a private pension provider.

If a paying parent makes payments into a private pension scheme, we will usually reduce the income figure we use by the full amount they pay, including the value of any tax relief.

This is taken from How we work out Child Maintenance..
I don't know if it's still current as it was from 2013

cfpcjls

We are going back to them for a mandatory reconsideration, the case worker said not to bother sending pay slips in as they didn't count the pension so there was no point when they did their assessment. Caseworker also questioned why paying parent only had a part time job rather than full time!

If the income is lower than the personal tax allowance are the pension contributions still classed as "relievable"?

Thanks for your help so far.

HoneyNutLoop

Based on this info:
http://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/tax-relief-and-contributions
Yes, but possibly with some maximum limit.

cfpcjls

These monthly payments are £43/month so unlikely to be anywhere near a maximum limit!

Thanks for all your help. Feel much more confident our mandatory reconsideration will be successful.