Promotion and Pay Rise

ami66

I'm getting a promotion and hopefully a pay rise, little bitter sweet as it comes as a result of a sudden passing away of a relatively young colleague.

Has anyone had an experience of a pay rise during IVA as I'm wondering how it will be dealt with.

I've read my IVA documents and it states 'you must report any overtime, bonus, commission or similar to the Supervisor if not included in the original surplus calculation, where the sum exceeds 10% of your normal take home pay'. I then have to pay over 50% of the amount over 10%.

It's possible the rise may be high enough that it will be over the 10% so will I be expected to pay the extra over each month until review or as it's a permanent change will I have to do a review?

I'm really not fussed either way but if it will be a review I want to start preparing now as I'll have extra expenditure and I'll be losing tax credits.

sourcrates

You have an annual review, every year, I would wait till then if the increase is only marginal and you will be losing tax credits also, your IP will be quite flexible on this, normally, unless you suddenly win the lotto or inherit thousands of pounds, they don't need to know.

UpToMyNeckInIt

ami66 wrote: »

I'm getting a promotion and hopefully a pay rise, little bitter sweet as it comes as a result of a sudden passing away of a relatively young colleague.

Has anyone had an experience of a pay rise during IVA as I'm wondering how it will be dealt with.

I've read my IVA documents and it states 'you must report any overtime, bonus, commission or similar to the Supervisor if not included in the original surplus calculation, where the sum exceeds 10% of your normal take home pay'. I then have to pay over 50% of the amount over 10%.

It's possible the rise may be high enough that it will be over the 10% so will I be expected to pay the extra over each month until review or as it's a permanent change will I have to do a review?

I'm really not fussed either way but if it will be a review I want to start preparing now as I'll have extra expenditure and I'll be losing tax credits.

Ami,

Be careful, and do get a response in writing from your IP.

I notice that the wording of your 10/50/50 rule seemingly relates only to 'overtime, bonus, commission or similar'. You could interpret that as referring ONLY to non-guaranteed income, NOT necessarily to a permanent pay-rise.

How it is applied will vary according to IVA provider.

Worst case scenario: Your IP MAY require you to undertake a full review, and base your revised IVA repayment on your increased net income (thus, you find you are potentially repaying ALL of your payrise.

Anecdotally, I have come across other IVA customer caught out in the same way ie: Thinking that they only need worry when they get a permanent payrise over 10%, then pay over 50% of anything over that. Then being told that the rule only applies to bonuses OT etc, not to a permanent alteration in pay grade.

Just make sure, if your IP is hard-nosed, that you make full use of some of the 'optional' expenses that some IVA customers claim for: Sky TV, hairdressing, meals at work etc. Check out the Stepchange Budget Guidelines Report here.

https://docs.google.com/file/d/0B7LabJy69BP1M0gxeHQ1SDFiN1E/edit?pli=1

(Sorry, have not yet been able to get hold of the latest version that came out in October 2013, but the figures only differ by a couple of quid here and there).

It is well worth a read, as it covers every form of expenditure, right the way down to allowances for hairdressing, kid's school dinners, meals at work, even hobbies etc.

Sorry to hear that you have inherited this in unfortunate circumstances, and hopefully your IVA company will work with you to give you a little more breathing space.

Do let us know how you get on.

ami66

Thanks UTMNII

I'm going to make sure I tell my IP anyway I would rather do that and lose all my pay increase than have issues later.

I really don't care that I may well loose all the increase as I really want the promotion and don't intended to let my IVA stop that.

Of course there is the implications of losing tax credits which I would have been losing any way come September as my eldest child leaves education. I'll also lose Child Benefit so I'm hoping to roll all the changes into one review.

Of course my promotion will mean additional costs like travelling to other sites, smart clothing and smart appearance ie hair cuts :cool: maybe give us a little breathing space in our budget. I'll check out that link.

The promotion has come at quite an opportune time because of my sons situation as in September we would have lost some income so without the promotion I would have been worse off.

headstuckinsand

Agree, I would definitely tell your IP about the permanent change to your income. You should at least get to see some benefit from the pay rise (albeit not all of it obviously unless you can convince your IP that your expenses have also increased to offset!)

The only thing I would advise though is to be aware of it when it gets to your annual reviews as the clause is based on your income at the beginning of the IVA, therefore you get to keep a proportion of the increase above what your income was when you started after taking into consideration any change to your expenses.

I have been extremely fortunate during my IVA to be in a position of now earning about 50% more than when I started, however each year I have the same issue with Payplan when they perform a simple I&E and ignore the pay increase and just claim my excess has increased so I should pay more. To note: each year they have revised the figure once they realise but they need to be prompted. I put this down to being on my 6th case manager so far.

ami66

ooohhh headstuckinsand that's interesting.

Last review I just made sure that the £50 a month increase in income was used up in the expenditure.

How do you work out what was due each year as increase to you and how do you put this in the I&E?

Was it a year on year increase or was it revised each review?

Sorry for so many questions in one post :rotfl:

Max_Maxwell

Absolutely tell your IP as soon as your salary increases. I'd been led to believe that a pay rise wasn't called into question until the next annual review which was incorrect and I got hit for a significant back payment. I was able to offset some with increased expenditure.

The point is you are still entitled to keep 50% of the increase after revised outgoings which is a reasonable arrangement. Imagine if you had to hand the entire increase over? Then there would be no incentive for any of us to push on in our careers. And remember that the IVA is for a limited time; your career is a long-term investment and the day your IVA ends you'll get another pay rise!

ami66

Well promotion was confirmed yesterday along with a much larger rise than expected, nearly 30% :eek:

So hubby called PayPlan immediately who were brilliant, very congratulatory to me for taking the promotion.

We have been told to wait for first new pay day then inform tax credits. Once we have new tax credits awards info we can then request a I&E review which will take into account all changes including any increase outgoings we may wish to include

At that point we will need to increase our payments by 50% of the excess but of course all of this will take a few months said PP and new payment will not start until after new I&E is agreed. :cool:

So it looks like we 'may' get to keep all increase for a couple of months

UpToMyNeckInIt

...30% payrise - can't say no to that. Nice one.

Looks promising that PayPlan will allow you to keep 50% of the net increase. What with the potential loss of tax credit, increased expenditure etc, you will hopefully be pleasantly surprised at how little your IVA repayment increases.

Once everything settles down, let us know how much you got to keep.

ami66

Ok sort of an update.

Finally got a new letter re Child Benefit and new Tax Credits Award however the tax credits award stopped at 31st August.

Called them and was told I will get a new award letter in September and not to call again before the end of September.

Payplan said fine can't do a review until that award comes so have so far been able to keep the additional £300 a month from my pay rise.

Which is just as well as I received the bombshell news a 9am this morning that I was redundant with immediate effect :eek: along with the approx 35 other employee countrywide.

Have spent the afternoon applying for JSA and jobs whilst feeling slightly sick and stunned.

UpToMyNeckInIt

...oh, what awful news.

Really feel for you. I too have previously worked for a small business, and remember when the 2 directors fell out, and effectively formed their own separate businesses, with neither one being big enough to justify my role along with most of the other staff. Nobody saw it coming either.

Ironically in my case, it was ultimately the catalyst for me becoming self-employed/starting my own business, which despite the IVA is going well.

So good things can come out of a bad situation.

What is the job market like in your field of work? I sincerely hope you find alternative employment soon.