Ex husband has hidden

[oofbitsilly]

Approximately £20,000 a year of his salary in pension or something to save £9 a month of maintenance?

Help me with the maths please, not sure I'm understanding my recent CMS letter.

He was paying £674 a month. It was our first year of going official after several years arranging it ourselves and him being a bit of a twat when I inherited after our divorce.

New calculation is £665. He hasn't changed job and contact remains the same.

CMS letter says the income AFTER pension but BEFORE tax and insurance is £82,000. It also says the income must go up or down by 25% to prompt a change in maintenance payable,

Am I correct in thinking he's engineered a way to do himself out of £20k gross income per year to facilitate £9 less a month? I mean, I know it's still there in a pension but he's 45 so won't be getting it for a while, surely...

YANBU - yes, he's a noxious dick and also a bit silly

YABU - no, you've done your sums wrong and you're the twat here

He pays £665 a month and you think you're entitled to another £200 for trips/extras? I think that what the maintenance is for.

He's probably done it because it is tax efficient, rather than to reduce your maintenance by 1.5%.

The amount he saves in tax probably far outweighs the £9.

So no, he has done it to save tax with the main motivation, with the £9 reduction being a side consequence of that.

I don't think I'm entitled to it, which is why I'm asking and prepared to accept a no!

It's for 2 teenagers and a younger one and it really doesn't go that far when food, bills and clothes are counted. It's relative, I know, and great compared to what some receive but I didn't pluck the figure from the air... it's calculated by CMS, not me. Sorry if that upsets you

I have read that earning just over the 100k threshhold is the worse amount to earn, as other exemptions are withdrawn, etc.
I mean the worse as a high earner, obviously. Someone earning 80k gets more somehow. But don't ask me the specifics, as I am not in that position and do not know all the details.
So, I am guessing it is a way to maximise his pension.

I think you've misunderstood.

They've worked out his contribution this year, and based on the last 12 months pay, its now £9 less. This change may be because he's now earning less than the previous year, or he's paying more into his pension. CMS are also notorious for getting their figures wrong.....for the past 2 years they've used the full earnings figure to calculate what OH pays his ex ie they haven't knocked off ANY of his pension contributions. They'll have to take this into account for next year's calculation, and so next year will likely fall as they catch up with themselves, even though he's on the same wage.

The bit you've misunderstood is the 25% thing. What they're saying is that they won't recalculate this years amount unless his income falls by more than 25% before the next calculation. Just because his amount is £9 less doesn't mean his £82k income must have fallen by 25%. They're only talking about an extra requested recalculation, not the annual ones. To fall by £9 his income with have only dropped by £60 (assuming he only has 1 child he's paying for).

I don't know if I've explained that very well! I hope you understand what I'm badly trying to say.

Using another example......the 25% change thing is for when the non-resident parents amount in calculated on say £82k and they send you a letter out in July saying he's paying £667 (or whatever) and then a few months later he loses his job and finds another one paying £30k. As his income has fallen by more than 25% he could ask them to do another calculation IMMEDIATELY rather than waiting for the next annual review. If he got another job paying £70k they wouldn't do another review, because his pay has fallen by less than 25%. He'd have to wait until the next annual review.

The £9 decrease you've got is just part of their annual calculation. It would seem that his salary has fallen by about £60.

Yes- between £100,000-£125,000 is subject to the technical “60%” tax rate because it’s the window where you start to lose your personal allowance.

basically for every £2 over 100k you earn, you lose £1 of personal allowance. When you’re a higher tax payer that means there’s an extra £12,570 you’re paying 40% on, except you lose it at half rate, so effectively in that window it’s an extra 20% on the tax you’re already paying. On top of which you lose access to free childcare hours, tax free childcare and some other benefits I think.

it is often very expensive to earn over 100k, unless you earn WAY more than 100k, so people get cautious about breaking that particular barrier. The easiest way to reduce your tax liability is pension contributions or charitable giving. There are other things like cycle2work scheme, etc

I'm sorry you've been treated badly.

But that 20k will save him 8k of tax so it's probably more about that. My husband and I both put similar in pensions and are early 30s.

You're very kind to take the time to explain that; thank you and I appreciate it a lot!