Reducing salary sacrifice and child support

[kittywittyandpretty]

One of the wonderful unintentional consequences of reducing the amount of salary sacrifice stand £2000 of course is the fact that non-resident parents won’t be able to load up their pensions to avoid child maintenance.
Just thought I’d flag that in case anybody else hadn’t thought of it.
It’ll be too late for me, but hopefully others will reap the benefits that they ought to be getting in the first place.

Can you cut down your hours so that you are losing the minimum amount that goes into the taxman's grubby hands and heve some extra time with your family? Or use the extra time to do some cash in hand work.

The annual limit is still £60,000.

Justices now the NI part (employer and employee) would go to HMRC instead of in your pension.

You can still put as much (as a proportion of your earnings) in your pension, you'll just pay NI on it.

The proposal isn't a salary sacrifice cap. It is only a cap of £2000 where there is no NI paid. People can still salary sacrifice more, they will need to pay NI on any over £2k.

This thread wasn’t meant to be a guide to how to screw the mother of your child.
I was just pointing out one of the unintended consequences might be that some of the non-resident parents - we all know who we’re talking about. They might not reduce their liability as much As they currently attempt to do

National insurance is 2% OP, I can’t see that changing anything.

It might mean some employers withdraw the option though which might help some

Reducing hours to spend time with family, and building your pension tend to be done without the primary concern of what one’s ex thinks about it…

It just means that they’ll pay NI on those pension contributions over £2k. The only beneficiary is the state, which I suppose is everyone (yay!)

The salary sacrifice thing is not until 2029 and could well be changed or abandoned before then. If it does come in and affects me substantially, I'll just invest in something other than my workplace pension which is more tax efficient.

I do think messing too much with pensions is a mistake - I know it's a spend not save measure but if people don't have decent pensions they will be relying much more on the state.

unless I’m missing something wouldn’t you just carry on and pay the extra tax? If you really wanted to avoid CM, of course.

Oh, we know that, but some of them are quite thick so you never know you luck. I’ve already read about some fluffing about how they won’t be bothering any more as a result and I thought whoopee your ex will be delighted to hear about that.

If they are already using salary sacrifice to avoid higher child maintenance then they will continue and just accept the fact that some if it will now be subject to NI, so less in the pension, but still now CM

Agreed. It’s really shortsighted.

And OP, having a parent with a decent pension who is financially solvent is a benefit to most adults, so your child will probably benefit from your ex doing this in due course.

You’ve got the words switched round the wrong way,
Having a decent parent with a pension would be a benefit to most adults. Those trying to reduce their child maintenance liability or not decent parents in my eyes.

OP - your ex will still be able to put the same amount in his pension, so I don't think this sal sac threshold will change anything here?!

Just means he pays more NI to taxman instead of it going in his pension. AFAIA he can still contribute the same % to his pension and reduce his adjusted net income though.

I just can’t see that reducing child maintenance would be a primary motivator for parents who salary sacrifice. Surely the NRP would be losing out on having 80% or more of the money sacrificed into their pay packet whereas the RP would lose 20% or less.

People do very strange things, Covid payments were absolutely fantastic for this because everybody that had been hiding their money in self-employment dividends reaped what they’d sewn