Student loan overpayment

epm-84

My monthly pay has varied a bit over the past few months and student loan repayment calculations that appear on my pay slip have been worked out on a monthly basis meaning I'm likely to overpay on my student loan over the course of the tax year.

What will I need to do at the end of the tax year if I want to claim back any repayment?

My student loan was taken out in 2003.

RDG

Stunent loan repayments are calculated on your monthly salary and therfore you dont overpay. You instead are just contributing the 9% of your pay over £1360 (the current monthly threshold IIRC).

All the increased payments mean is you pay it off sooner.

Unless you mean you are reaching the end of your loan and think you will have finsihed paying it back this year, but may overpay. In that case you need to ring the student loans company.

epm-84

The student loan website says 9% of the difference between your salary and £15,795. Where do you get the information that it's on a monthly basis from?

I know payroll uses a monthly calculation as they deduct the repayments at source not ask you to pay it at the end of the year.

jason1231972

I reclaim mine every year that I earn under 15k, but occasionally work overtime that makes the 'system' think I earn over 15k, if that makes sense? For example, last year I earned £14700, but had over £100 deducted from my pay throughout the year, due to having 'good' pay months. So I got it back.

Send your P60 for each relevant claim year to the Student Loans Company, and a covering letter. Your P60 should state the amount you earned, plus the amount deducted by the SLC. If you provide bank details (in your own name), they'll pay directly into your bank. Takes about a month.

They lost my P60 this year!

SLC HQ
100 Bothwell Street
Glasgow
G2 7JD

However, if you do reclaim, bear in mind that your outstanding loan balance is recalculated, meaning your loan will cost more and take longer to repay.

I have, effectively, never paid a penny back off my loan. I now owe quite a bit more than I borrowed

jason1231972

epm-84 wrote: »

The student loan website says 9% of the difference between your salary and £15,795. Where do you get the information that it's on a monthly basis from?

It is - all income contingent student loans are repaid on a monthly basis, as can be seen on any borrower's payslip. The problem is, one could hypothetically earn £14,000 for one month, tricking the system into thinking that they earn £168k if extrapolated over 12 months. Boom...£1100+ student loan deduction in one month!

(very extreme example, but it happens on a much smaller scale a lot).

epm-84

jason1231972 wrote: »

It is - all income contingent student loans are repaid on a monthly basis, as can be seen on any borrower's payslip. The problem is, one could hypothetically earn £14,000 for one month, tricking the system into thinking that they earn £168k if extrapolated over 12 months. Boom...£1100+ student loan deduction in one month!

(very extreme example, but it happens on a much smaller scale a lot).

So are you saying that such a huge repayment could be reclaimed if the other months pay was significantly lower, or does it only apply if the total salary is below £15,795*?

*£15,795 is the new threshold for student loan repayments now, increased from the previous £15,000. So if in your example this year you earned £15,200 then you've not gone about the current threshold.

jason1231972

epm-84 wrote: »

So are you saying that such a huge repayment could be reclaimed if the other months pay was significantly lower

That's how it works, yes.

*£15,795 is the new threshold for student loan repayments now, increased from the previous £15,000. So if in your example this year you earned £15,200 then you've not gone about the current threshold.

Worked example:

£14,000 earned in April 2012, but nothing else earned (it's a hypothetical one-off job).

System thinks that for the whole of 2012-13, £168,000 will be earned (£14k x 12).

£168,000 minus £15,795 = £152,205 as the figure that the SLC can get their hands on, after the £15,795 disregard.

9% of £152,205 is £13,698.45

Divide £13,698.45 by 12 (because this is what the SLC think they have to play with for the whole year, split down monthly), and they'll take £1141.54 in one month.

This is all despite the fact that the borrower only earned £14,000 in one month, for the whole year.

But (as far as I'm aware), they'd have to wait until after 05-04-2013 in order to get the money back.

RDG

Sorry I wasnt clear

If you earn over the theshold for one month then you repay based upon that amount as explained here

http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678490&_dad=portal&_schema=PORTAL

The only time you can reclaim anything back is if you earn less than the whole £15725 in one year, in this case you have to wait until you have your P60 to claim.

Your opening post reads as though you are already making repayments, but in some months they have varied. In this case you must already be earning over the theshold and therefore cannot claim anything back.

jason1231972

RDG wrote: »

Sorry I wasnt clear

If you earn over the theshold for one month then you repay based upon that amount as explained here

http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678490&_dad=portal&_schema=PORTAL

The only time you can reclaim anything back is if you earn less than the whole £15725 in one year, in this case you have to wait until you have your P60 to claim.

Your opening post reads as though you are already making repayments, but in some months they have varied. In this case you must already be earning over the theshold and therefore cannot claim anything back.

You can (or you could, until last financial year at least, don't know how it'll pan out this year) claim for years when you earned over £15,000 (now £15,725), but, you paid more than 9% of the difference between 15k and your actual salary.

Unless the system has changed somehow, it's a case of you can earn the threshold amount, then only 9% of the difference is due, no matter how it tots up over the full year. If they take more than 9% of the difference between the threshold and your actual salary, the difference can be reclaimed.

My OH claimed...wait for it...£7.00 one year. She earned £16k on the nose, so £90 was due in deductions (based on £15k), but due to irregular pay, etc., the SLC took £97 from her.

(to be fair, she'd misunderstood the amount she was due...she mistakenly thought it'd be the full £97 for some reason. She wouldn't have bothered making a claim for £7 if she'd done the sums correctly!)

epm-84

jason1231972 - that makes sense as it's then consistent with Income Tax and National Insurance.

With tax the personal allowance is £8,100 i.e. you don't pay tax on the first £8,100 you earn each year.

If you earn £2000 a month for the first 5 months of the tax year and are then made redundant and don't earn any more that tax year then you will have earned £10,000 but been taxed as though you would earn £24,000 as tax has been calculated on a monthly basis. That would mean you could claim back your overpayment at the end of the tax year. The fact that you've earned over £8,100 only affects the amount of money you get back not whether you are entitled to money back or not.