Pensions contributions not showing on CM payment calculation

sheramber

What is his wage after pension oaymsnt  is deducted? 

What figure have child maintenance  used ? 

crazymoose2000

DE_612183 said:

Sorry - I'm lost here - are we talking about pension contributions being made and Child Maintenance payments - what is the link between the two?

To work out child maintenance to be paid, CM deduct pension contributions from pay but on my friends calculation the pension contributions are showing as £0 even though he pays £121ish per month so should show over £1400 for the year not £0

crazymoose2000

sheramber said:

What is his wage after pension oaymsnt  is deducted? 

What figure have child maintenance  used ? 

CM have used the yearly figure WITHOUT deducting the £1456 he paid into his work pension

sheramber

There are three ways to make pension payments. 

Salary Sacrifice where salary is reduced and payment made to pension by employer 

Net pay where the pension payment is deducted before tax and nic are calculated. 

Both these cases  will be reflected in the earnings reported to HMRC 

These are the cases where CMS say they do need to know about them as the employer has already deducted them. 

Relief at source payments, which are deducted after tax and nic are calculated. 

These  are the cases that CM S need to be told about as they are not reported directly  to HMRC.

If these are the type of payments your friend makes he needs to tell CMS about them as otherwise they don’t know about them. 

He can contact CMS through his online account

https://www.gov.uk/child-maintenance-service/sign-in-account

Thorndorise

Don't usually comment on this board, but this pricked my ears up.

As @sheramber above has said, if your friend's monthly income is reduced accordingly with that contribution it's likely it's via salary sacrifice or 'net pay' (which is a confusing term), then this would be reflected in their CM report as, the pensions payments have already been captured via PAYE.

But, if they are making them voluntarily e.g. Additional Voluntary Contributions, these are sometime via RAS, (so after tax and NI) and the 20% basic tax relief is added to the contribution of £121 by the pension provider.

Stupidly the CMS have two boxes when putting your details in, Workplace pension and Personal Pension.
Workplace pension's are already 'captured' - so would show £0 under pensions.

However even if you make any AVCs, to a personal pension OR a workplace pension, they call them personal pension. Stupid but true. To get these captured in your friend's CMS calc, they would need to provide a pension statement for the relevant tax year, which will show their payments (£121) and the basic tax relief of £30.25 for each month. The total of this (assuming they are basic rate tax payer) would be deducted from their income that the CMS hold on file (X - £1,815).

The latter is not awfully common and it is likely either one of the first two mentioned above, it may also be worth checking which tax year the CMS are using as sometimes they may be using an older tax year, and maybe the pension wasn't paid them or was lower...worth looking at.

crazymoose2000

Thorndorise said:

Don't usually comment on this board, but this pricked my ears up.

As @sheramber above has said, if your friend's monthly income is reduced accordingly with that contribution it's likely it's via salary sacrifice or 'net pay' (which is a confusing term), then this would be reflected in their CM report as, the pensions payments have already been captured via PAYE.

But, if they are making them voluntarily e.g. Additional Voluntary Contributions, these are sometime via RAS, (so after tax and NI) and the 20% basic tax relief is added to the contribution of £121 by the pension provider.

Stupidly the CMS have two boxes when putting your details in, Workplace pension and Personal Pension.
Workplace pension's are already 'captured' - so would show £0 under pensions.

However even if you make any AVCs, to a personal pension OR a workplace pension, they call them personal pension. Stupid but true. To get these captured in your friend's CMS calc, they would need to provide a pension statement for the relevant tax year, which will show their payments (£121) and the basic tax relief of £30.25 for each month. The total of this (assuming they are basic rate tax payer) would be deducted from their income that the CMS hold on file (X - £1,815).

The latter is not awfully common and it is likely either one of the first two mentioned above, it may also be worth checking which tax year the CMS are using as sometimes they may be using an older tax year, and maybe the pension wasn't paid them or was lower...worth looking at.

Thankyou so much for the comment, much appreciated.