Disposable income over £100

MrsST

Is it true that if you have disposable income over £100 they take a percentage of all of it not just the excess?

With child benefit added into our monthly income, we will be looking at a surplus of £154 after rejigging our figures to remove things we don't think will be allowed.

So, if they are going to take a percentage of this, in effect they are just taking our child benefit. This seems really wrong to me.

Can anyone advise please?

Waspeze

Not sure how it works with child benefit but the answer to your original question is yes they take a percentage of the whole amount.

Waspeze

Just on a side note (I don't necessarily agree or disagree) but presumably you upped some of your expenditure to take into account spending on your kid(s) therefore it could be argued that the child benefit which would normally have been spent on these things should be included?

I don't have an opinion on this but just playing devils advocate

MrsST

Waspeze wrote: »

Not sure how it works with child benefit but the answer to your original question is yes they take a percentage of the whole amount.

Thanks for that Waspeze.

Seems a bit off that they don't just take from the surplus. I'll be interested to find out how child benefit comes into the equation then as that is purely supposed to be for the children.

I hope that our OR has some recent experience of just how expensive it is to buy shoes for children, especially when you've got them in duplicate both with feet that seem to be growing at exactly the same rate!! I nearly had a fit a month or so ago when I had to buy each of them shoes and it set me back nearly £50!

blind-as-a-bat_2

Child benefit is NOT to be included in calculations for an IPA whatsoever

This is a discision made in the High Court

MrsST

Waspeze wrote: »

Just on a side note (I don't necessarily agree or disagree) but presumably you upped some of your expenditure to take into account spending on your kid(s) therefore it could be argued that the child benefit which would normally have been spent on these things should be included?

I don't have an opinion on this but just playing devils advocate

I don't think we have upped our expenses in any other way than the obvious that we are feeding four (my two eat well for small people!). Our clothing expenditure seems quite minimal at £100 for the four of us but as per my post above, when you are having to buy 2 pairs of shoes every 6 weeks or so, that £100 per month won't go very far between us.

Waspeze

Cheers Bat

Which is the "benefit" that is included? I'm sure there's one?

MrsST

blind-as-a-bat wrote: »

Child benefit is NOT to be included in calculations for an IPA whatsoever

This is a discision made in the High Court

Thanks for that

If we are lucky, we might avoid an IPA then as we aren't exactly flush for cash!!

blind-as-a-bat_2

31.7.9 State benefits

April 2008

Whilst an IPA should not be sought where the bankrupt's only source of income is state benefit [note 3], the official receiver should not automatically discount the possibility of obtaining a contribution from a bankrupt who has surplus income but is also in receipt of benefit. Any calculation to identify surplus income should include all available income, including state benefits, paid to an individual for the general benefit of that individual and their family. This includes child tax credit, which is also a state benefit and comprises part of the income available to the bankrupt and his/her family, against which an IPA can be calculated. The person making the income and expenditure calculation (usually the examiner) should initially ascertain whether the bankrupt is also in receipt of non-benefit income. If this is the case, an IPA should be considered, the total income should be established (see other income sources at paragraph 31.7.7) and the bankrupt's reasonable expenses deducted (see paragraph 31.7.19) to cover his/her reasonable domestic needs. An assessment can then be made as to whether the bankrupt is in receipt of surplus income. If an IPA is to be sought, any surplus should be less than or equal to income from the source other than benefits. It should be remembered that whilst the bankrupt's total income (including state benefits) should be included in the calculation of surplus income, it is the income from sources other than the benefit(s) which is providing the payments under the IPA/IPO, which is why an IPA should only be sought to the extent of the non benefit income.

The only exception to the inclusion of state benefits in an income payments calculation is where a bankrupt is in receipt of child benefit, which is not an income based benefit (unlike child tax credit, see above). The High Court has stated as a matter of public policy that child benefit should not be included in the statement of income when applying for an IPO and there is no reason why the same principle should not be extended to cover IPAs.

Where a bankrupt’s income solely comprises state benefits, it is unlikely that a surplus will arise except where they are in receipt of non-means tested benefits, for example Disability Living Allowance. The official receiver should consider that it is always open to the bankrupt who has a surplus and wishes to contribute, to make voluntary payments. If the bankrupt was minded to contribute on a voluntary basis, having been informed that their income appeared to be sufficient to produce a surplus taking in to account their reasonable domestic needs, a voluntary agreement could be incorporated into an IPA, but it would have to be clearly noted that no enforcement action would be taken if the bankrupt failed to make agreed voluntary payments.

The Department of Work and Pensions website provides useful information regarding allowances and benefits currently in force and can be accessed at http://www.dwp.gov.uk/.




The full text on IPA,s can be found here if you fancy a bit of a read http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch25-36/Chapter31/part7/part2/part_2.htm

Waspeze

It's ok, if I read that right I think you've answered my question

child tax credits are included in the calculation ... I thought it was child something

blind-as-a-bat_2

Waspeze wrote: »

Cheers Bat

Which is the "benefit" that is included? I'm sure there's one?

CTC and WTC can be included as long as other income is above a certain level.

Basicaly they cannot take any benefit money directly to pay for an IPA, but can count it towards your total income