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Bankruptcy and Working Tax Credit
KimLyn
Posts: 40 Forumite
Hi,
We currently receive working tax credit based on last years income (Husband was self employed). My husband has since started a new job in April where he earns more money.
I have phoned DWP and because he is on a six month probationary period, we have been told to wait until this time is past to request a stop in our payments, just in case he isn't kept on. We can then pay back the payments made to us if he is kept on.
The question I have is do I include this benefit payment as an income because fingers crossed, we will be stopping it in October?
The added benefit shows we can afford to make monthly payments after bankruptcy, but if the benefits are stopped in October then we have no surplus income.
I have read this paragraph this evening -
31.7.43 IPA/IPO contribution should not exceed non-benefit income
When dealing with an income payments calculation which includes elements of benefit income, it will be necessary to take into consideration whether the bankrupt has sufficient non-benefit income i.e. earned income, receipts from a private or occupational pension (see section (d) of this part), foster care payments (refer to paragraph 31.7.39) etc., from which an income payments contribution can be taken. An IPA/IPO assessment can still be made using the income payments calculator, but if an IPA/IPO is to be sought, the amount of any payment must not exceed the income from the source other than state benefits. Examples of calculations and the adjustments to be made where the bankrupt is in receipt of benefit income can be found at Annex A. It should be remembered that whilst the bankrupt's total income (including state benefits) can 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/IPO should only be sought from the non-benefit income.
Does this mean that the OR can't use our current benefit as disposable income for an IPA/IPO?
We currently receive working tax credit based on last years income (Husband was self employed). My husband has since started a new job in April where he earns more money.
I have phoned DWP and because he is on a six month probationary period, we have been told to wait until this time is past to request a stop in our payments, just in case he isn't kept on. We can then pay back the payments made to us if he is kept on.
The question I have is do I include this benefit payment as an income because fingers crossed, we will be stopping it in October?
The added benefit shows we can afford to make monthly payments after bankruptcy, but if the benefits are stopped in October then we have no surplus income.
I have read this paragraph this evening -
31.7.43 IPA/IPO contribution should not exceed non-benefit income
When dealing with an income payments calculation which includes elements of benefit income, it will be necessary to take into consideration whether the bankrupt has sufficient non-benefit income i.e. earned income, receipts from a private or occupational pension (see section (d) of this part), foster care payments (refer to paragraph 31.7.39) etc., from which an income payments contribution can be taken. An IPA/IPO assessment can still be made using the income payments calculator, but if an IPA/IPO is to be sought, the amount of any payment must not exceed the income from the source other than state benefits. Examples of calculations and the adjustments to be made where the bankrupt is in receipt of benefit income can be found at Annex A. It should be remembered that whilst the bankrupt's total income (including state benefits) can 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/IPO should only be sought from the non-benefit income.
Does this mean that the OR can't use our current benefit as disposable income for an IPA/IPO?
0
Comments
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yes you do include it in the income calculation,Hi, im Debtinfo, i am an ex insolvency examiner and over the years have personally dealt with thousands of bankruptcy cases.
Please note that any views i put forth are not those of my former employer The Insolvency Service and do not constitute professional advice, you should always seek professional advice before entering insolvency proceedings.0
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