How do overtime payments work

Barkley_2

HI all

Well, were at the start of our IVA (just 58 payments to go :T )

I have a salary allowance of £1700 before any extra money is taken and the wife has £575.

If my wife gets £670-£575 allowance leaves £95. Is it a 50/50 split or something else?

When I first enquired about the IVA, I was advised that the first £170 overtime was my allowance then anything over that gets split 50/50. I have enquired again twice and again recieved 2 different answers, especially when paying overtime. One says it gets reviewed yearly and we get billed (just have to keep the money to one side) and another says that when we get overtime, send in the payslips and they will tell us what extra we owe and to pay it with our debit card.


Any help welcome

Charco_2

I would put it to one side... and just say that that's what you were told to do...

Check your IVA terms but usually you are allowed the first 10% and the rest is a 50-50 split between you and your creditors. The idea is that you should pay back as much as you ca afford to your creditors so if you can afford more then pay more HOWEVER, if there is no direct benefit for you to do overtime then you simply wont do it!

Keep it held over for your first annual review and see what they say... calculate it yourself as 10% and then 50-50 split - and then don't get bullied into paying anything more unless they can justify it.

mia1830

Charco wrote: »

I would put it to one side... and just say that that's what you were told to do...

Check your IVA terms but usually you are allowed the first 10% and the rest is a 50-50 split between you and your creditors. The idea is that you should pay back as much as you ca afford to your creditors so if you can afford more then pay more HOWEVER, if there is no direct benefit for you to do overtime then you simply wont do it!

Keep it held over for your first annual review and see what they say... calculate it yourself as 10% and then 50-50 split - and then don't get bullied into paying anything more unless they can justify it.

Hi Charco,

I have now sent all my stuff into Grant Thornton so just waiting on them getting back to me. What i would like to ask is how do they know what overtime you have done, do you have to hand in your P60 every year? Thanks

Barkley_2

Thanks Charco as always

Charco_2

One last point actually Barkley,

be aware that this could be calculated two ways - monthly or annually!

If you take home £1,500 per month (made up figure)... then every month you can earn £150 overtime without having to contribute it to your IVA (your IP will probably try to review your figures at the annual review if this was consistent though!)

(Twelve times £150 = £1,800) So you would THINK that reasonably you could earn £1,800 in over time ANNUALLY without having to consult your IP... However that is not necessarily the case!

If in January you earned £100 overtime then that's ok, it's £50 within your limits.
If in February you earned £200 overtime you couldn't offset the extra £50 against your January allowance! (So you'll owe £25 from February... and so on!)

Your total overtime in the year might not exceed the £1,800 but your monthly overtime payments might have exceeded your monthly allowance of £150 so you'd owe for those months!

So it's best just to err on the side of caution with this one when calculating!

Barkley_2

I think what I will do is send in my wifes payslip as she has overtime this month and go for a monthly check, which leads me to another point.

When we took out the IVA, I was full time and the wife was part time, but to have the IVA accepted, my wife had to get a full time job. She explained this to her employer who has given her the hours required to meet the changes to the proposal, but it is paid as overtime due to some NHS thing. As mentioned, I work full time and my allowance is £1769 before I need to declare it and the wifes allowance is £575, but this was before the extra hours were taken into account. Would this threshold still stay the same even though the wife has doubled her hours or would the threshold rise to say £675 before we need to declare?

Charco_2

Is it a joint IVA?

They can't have it both ways... it's either overtime or its part of her normal income.

Normal income will already be considered in your I&E, then the smaller overtime (with the bigger overtime allowance) will be taken into account in the usual way!

Barkley_2

It is a joint IVA. Just wondered if her allowance would be upped was what I was trying to say

Will contact my IP tomorrow and see what they say.