Example 2 - Old Scheme
Old Scheme - (identified by ten digit reference number)
First week
If the:
- employee’s net earnings are £120 per week,
- the normal deduction is £30 per week,
- this would leave £90,
- the protected earnings rate is £100 per week.
You would only deduct £20 and carry forward the £10 owed to the next pay period.
Second week
If the:
- employee’s net earnings are £80 per week,
- the normal deduction is £30 + £10 from the first week = £40,
- this would leave £40,
- the protected earnings rate is £100 per week.
You would not make any deduction as the amount left is below their protected earnings rate. You would carry forward the £40 owed to the next week.
Also, because the employee’s net earnings this week were £20 below their protected earnings rate, you would add this £20 to their protected earnings rate to the next week.
Third week
If the:
- employee’s net earnings are £130,
- the normal deduction is £30 per week + £40 carried over from the second week = £70,
- this would leave £60,
the protected earnings rate is £100 + £20 carried over from the second week = £120.
You would only be able to deduct £10 from your employee (because of the higher protected earnings rate). This should be sent to us and the £60 owed carried forward to the next week.
Fourth week
If the:
- employee’s net earnings are £150 per week,
- the normal deduction is £30 per week + £60 carried over from the third week = £90,
- this would leave £60,
- the protected earnings rate is £100.
You would be able to deduct £50 and carry forward £40 owed to the next pay period. As their net earnings are above the protected earnings rate there are no arrears of protected earnings to carry forward.
The examples show that the amount of child maintenance owed by the employee and the level of their protected earnings can be adjusted if their earnings fluctuate.
If your employee’s net earnings regularly go below their protected earnings rate their child maintenance assessment may need to be changed. They should contact us and tell us about this change in their circumstances.
Forms
If you maintain payroll software
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