We take "digs" from DS1 (15). He has a part time job and he also has a pension type thing from his late biological Mum that pays an amount each month. When he first mooted the idea of a part-time job he was looking at a paper round paying about £20 a week and he was delighted by that prospect. As it is he landed a really good weekend job (2 hours on a Friday after school & varying hours on a Saturday usually one whole day then the next week just a short one) that pays well and ties in with what he wants to do in future. His wage for the day is no different to the other staff there so between the two he averages around £400 a month.
After a couple of months of frittering it on nothing we decided to "charge" him digs. He keeps £200 and pays the rest over (sometimes £200, sometimes less). For the first 6 months he moaned constantly and we had a few rows, however now that he has remembered the whole conversation and not just the "we're taking all your money off you bit" he's happy we have.
We pay for his bus pass, his general clothes and school uniform and lunches and will do so while we get child benefit for him and he's at school. It's only right imo. We also pay for his football because we've been doing so since he was little and it wouldn't be right to effectively punish him for having the get up and go to get the job (even though he sometimes has more spare cash than me!).
The money we've taken from his is in a separate account and is used to go toward big things he's been saving for, to pay toward half of big school trips and will meant he can still have his whole £200 when he takes time off the job for exam study (a rule in place when he was allowed to get it). There will also be a big chunk for him for things like driving lessons or whatever once he's a bit older.
I think it would have been silly of us to allow him to get used to having that amount of cash to fritter each month. It's so easy to get used to a set financial position and he was getting to the end of the month with a new hoodie, maybe a trip to the bowling, a computer game, a couple of magazines then no real idea of where the rest went! He was drinking waaaaaay too much coffee in bliming Costa with his friends and I don't/didn't like the idea of it being known to the people around him that he had a lot (for their age) of money - I think that way trouble lies. Now they all think he's skint coz his meanie parents charge him dig :)