Remind me how an IPA works...

singingsister

Hi guys

Hubby is in the process of job hunting but I wanted a heads up about an IPA.

My IPA is just my NT code.

If hubby gets a job and an IPA is applied by the OR then how long is that IPA for? Is it for the life of the bankruptcy (so Nov in our case), or is it 3 years.

I'm worried that if hubby did/does get a job, we'd loose most of his earnings to an IPA as currently our SOA shows our income and outgoings matching (just!).

We'd obviously have increased childcare costs as DD would have to go to nursery full time and increased travel costs but for him to work to loose it ALL (or most of it) to an IPA seems a tad not fair (although do appreciate we have debts to "pay back").

How does it work?

Sarah

wildheart83

Generally speaking, it'll be 3 years from when you get the agreement. However, some OR offices say it's 3 years from the date of the BR, but this is less common.

For example, you go BR in November 2011 and start working in March 2012, by the time you notify the OR and do a new SOA, it could be April or even May 2012 by the time you get the agreement in. So in theory it would be 3 years from May 2012, others are a bit more lenient and say it's 3 years from when you actually went BR.

singingsister

3 years!!! Cor that is a long time.

What happens if you don't get a job until your years BR is up? Would an IPA apply after your date of discharge?

wildheart83

If your circumstances don't change by the time your discharge date comes round then you wouldn't have an IPA.

Some people think it's easier to not look for a job until their BR is up but it drove me mad not working.

My circumstances changed soon after BR, however not having my debts to pay allowed me to take a much lower paid job (but one that I was happier in, if that makes sense)

3 years sounds like a long time but it's really not

singingsister

It is driving hubby mad not working but by the same token to loose it all (or most of it) to an IPA seems not fair.

If there were some hard and fast rules about what percentage you loose of your income based on bands then at least we could make an informed decision.

For us, what with the cost of childcare and extra travel - although hubby can look at a lower paid job the problem he has is in his field - he's too qualified and experienced for a lower paid/level job.

And for the fact that part of his career involves working evenings and weekends - it would impact on our family life. Now if you are being remunerated for that then fine - but to lose it all and not technically get any "benefit".

Harsh.

Before I get flamed - I know the IPA is to pay debts that we "owe" but it's still not fair!

wildheart83

It's along the lines of people who work to pay almost everything back out in childcare, council tax, rent etc when they see others on benefits who pay for nothing.

You have to look at the long term gains of working. Yes you'll likely have to pay an IPA, but it's only for a maximum of 3 years. Will the jobs that are around just now still be there come November when he's discharged?

Why not do an SOA based on an average salary and see what your surplus would be? Factoring in everything he would have to pay out for the new job eg dry cleaning, extra travelling costs etc

singingsister

wildheart83 wrote: »

It's along the lines of people who work to pay almost everything back out in childcare, council tax, rent etc when they see others on benefits who pay for nothing.

You have to look at the long term gains of working. Yes you'll likely have to pay an IPA, but it's only for a maximum of 3 years. Will the jobs that are around just now still be there come November when he's discharged?

Why not do an SOA based on an average salary and see what your surplus would be? Factoring in everything he would have to pay out for the new job eg dry cleaning, extra travelling costs etc

Yes I know you are right. He's struggling to find a job and has been since last April when he was made redundant. But obviously now we are BR he can look for a lower wage.

Good idea about doing an SOA based on him working. Would give us an idea of where we might be heading.

wildheart83

As an aside, it will look better on the old CV to have been working (even if it's a cr$ppy job) than to not have been working at all. Obviously that depends on the industry he's qualified in, but from experience it certainly wasn't looked on in a negative light.

singingsister

Yes you are also right!

wildheart83

I should add, returning to work is a decision that only you and your OH can make. Good luck with whatever you decide but feel free to PM

singingsister

Thank you a million times over.

Hubby had a meeting with a company who said they might have a job in the pipeline for him. The person who's currently in the job will, in the next couple of weeks be leaving (but this person doesn't know that yet!) and they want someone ready to fill the position.

But they can't formally offer it to hubby yet. They've told hubby to think about it.

It's a lot less money than hubby used to be on (but I have to remember he's been out the job market for almost a year) and I also really don't want him to technically work for "nothing" - loosing all the "surplus" (although we still have friends to pay back - money to put back in our daughter's account that we had to borrow etc) for 3 years.

Hubby reminded me that I need to look more long term. Which is also true.