Section 3 introduces a new ancillary order which will be available to be issued alongside suspended sentence orders. The order will require an offender to pay a monthly amount which corresponds to a particular percentage of their excess monthly income above a threshold for up to the duration of their suspended sentence.
	It does this by inserting a new Chapter 5 into Part 7 of the Sentencing Code, containing new sections 161A to 161G.
	Section 161A defines what an income reduction order is. The section also contains a power to set a threshold of monthly income (which must be at least 170 times the hourly amount of the national minimum wage) above which constitutes "excess monthly income", and sets out that regulations may make further provision about how monthly income is determined, including whether the amounts to be deducted from income before the threshold is applied.
	Section 161B sets out that the Secretary of State must by regulations make provision about how the court is to determine the percentage of the offender’s monthly income which will be payable, but that such provision must specify a maximum percentage which may be payable, which itself must not exceed twenty per cent. It further lists factors which such regulations may provide that the percentage set by the court is to depend on.
	Section 161C sets out that the Secretary of State may by regulations make such further provision about income reduction orders as the Secretary of State considers appropriate, including provision about collection, monitoring compliance, enforcement, recovery and appeals.
	Section 161D sets out the circumstances in which an IRO is available to the court. It also gives the Secretary of State a power to make provision by regulations as to the circumstances in which a court may not make an income reduction order, and an offender is therefore exempt. It sets out that where an income reduction order is available, the court may make such an order whether or not it also deals with the offender for the offence in any other way,
	Section 161E sets what an income reduction order must specify, the limit on the period for which the order can have effect, what the court must have regard to in determining whether to make an order or what percentage to make payable under the order, and how the power to make income reduction orders is to interact with powers to make other orders.
	Section 161F makes provision for the variation or discharge of an income reduction order. It sets out when an income reduction order may be varied or discharged, who may apply for variation or discharge, and how the order may be varied.
	Section 161G contains supplementary provisions regarding income reduction orders. This includes definitions, a power for the Secretary of State to amend the definition of "income" by regulations, detail on the nature and the parliamentary procedure that applies when exercising powers in the new Chapter, and a consequential amendment.
Part 1: Sentencing Section 3: Income reduction orders