Old Scheme - (identified by ten digit reference number)
If the:
- employee’s net earnings are £160 per week
- the normal deduction rate is £30 per week
- this leaves £130 per week
- and the protected earnings rate is £100 per week.
The full deduction of £30 can be made and sent to us. The employer can deduct up to £1 for administration charges and the employee keeps the rest.
The actual amounts will depend on the persons individual circumstances.
What happens if they sometimes don’t earn enough to pay the full amount of child maintenance owed?
The example below shows what happens when there are not enough net earnings to pay the full amount of child maintenance owed .
Again the amounts involved will depend on individual circumstances.
First week
If the:
- employee’s net earnings are £120 per week
- the normal deduction rate is £30 per week
- this leaves £90 per week
- and the protected earnings rate is £100 per week.
Here, you would only be able to take £20 as you can not go under the protected earnings rate of £100. You would carry forward the £10 owed to the next pay period.
It is your responsibility to carry forward any shortfall to the employee’s next payment.
This is how it would work:
Second week
If the:
- employee’s net earnings this week are £130 per week
- The normal deduction is £30 + £10 from the previous week = £40
- This leaves £90
- The protected earnings rate is £100.
You cannot go below the protected earnings rate so you would deduct £30 and send it to us and carry forward the £10 owed to the next pay period.
There may be several weeks where arrears are carried forward before being paid off.
What should I do if the employee sometimes earns less than their protected earnings rate?
If their net earnings are less than their protected earnings rate, the difference between them should be added to the protected earnings rate for the next pay period. This will ensure that over time the employee receives average earnings of at least their protected earnings rate.
You will not be able to deduct anything from their wages and you should not deduct £1 for administration costs.
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