Rendundancy and Student Loans

dragondancer_2

Hi

Unfortunately, I have been told today that my office has lost the contract that is the sole permanent work in our office.

We had one of the big bosses in to tell us that if they don't find new business by March our office will be shut At the moment they say they are trying to get new business but anything new that's come in during the last 3 years has gone to our HQ.

If it comes to it, I should be able to find a job but I have just started paying back my student loan. What happens with the redundancy payment? Do SLC treat that as a salary and take their cut or is it off limits to them?

This may be one of the more bizarre questions I know and probably not in most top 5s but I have read through a lot of the threads on here and seen some good info so a lot of other questions have been already answered.

Thanks

Akashearsy

I don't think so SLC is deducted on a month to month income basis how could they take a lump sum they don't know what your future income will be I have a SLC and due to a bad accident 4 years ago now only work 16 hours a week even though I was offered early retirement but grateful and I can still work and want to, but due to my income has dropped significantly I no longer pay SLC anything that is the way it is designed

Hope this helps

paddedjohn

Are lump sums exempt? I thought that anything over £1750 a month 1/12th of £21k was subject to a 9% deduction for student loan repayment.

nomunnofun

paddedjohn wrote: »

Are lump sums exempt? I thought that anything over £1750 a month 1/12th of £21k was subject to a 9% deduction for student loan repayment.

Of earnings, Yes. redundancy payment lump sums (below £30000) are not taxable and should not have student loan deductions applied.

Golden rule - if it is liable to NIC, it is liable to student loan deductions.

http://www.hmrc.gov.uk/manuals/cslmanual/cslm17055.htm

dragondancer_2

thanks for that