Car salary sacrifice payments crippling (complicated issue)

morrit

Hi. This is a complicated one and I will try and explain it as best as I can. I agreed to a salary sacrifice car in July last year but shortly before delivery I was rushed to hospital with a life threatening illness, acute necrotising pancreatitis. My employer has occupational sick pay for 12 months. 6 months full and 6 months half. My illness has caused me to be off work now since July last year bar an 8 week period where I attempted to go back to work before further complications arose. Basically in a nutshell my body suffered organ failure and it was a 1 in 5 chance of survival but survive I did. It's been life changing in the fact that I don't know when I will recover and am still subject to numerous tests. The doctors won't give me a guarantee on recovery as the illness presented a number of other side effects.

Well now my pay is at half and the car payments are still being taken.

Several questions - my working hours normally are 37.5. Am I still classified as working those hours despite being sick?
My take home pay at the end of the month now is less than the national minimum wage if I was doing 37.5. But as I am off sick am I not classified as doing the 37.5 if that makes sense? My employer says that its not based on NMW but the lower earning level which I think is 107 per week. I am not entitled to housing benefit as my wage is too high and I don't qualify for any other benefits according to various calculators.

My pay will cover my rent for the month and council tax but that's it. I can't even use the car anyway at the moment as I am too poorly but this may get better. But even if I did return it I wouldn't have the money to stump up the early termination fee. Can anyone offer advice because I am at my wits end. Sleepless nights are exacerbating the illness considerably.

Had I known this would have happenned I wouldn't have touched it with a bargepole. At least with a loan I could negotiate an extension until I was able to pay fully again. This just seems mad!

sangie595

morrit wrote: »

Hi. This is a complicated one and I will try and explain it as best as I can. I agreed to a salary sacrifice car in July last year but shortly before delivery I was rushed to hospital with a life threatening illness, acute necrotising pancreatitis. My employer has occupational sick pay for 12 months. 6 months full and 6 months half. My illness has caused me to be off work now since July last year bar an 8 week period where I attempted to go back to work before further complications arose. Basically in a nutshell my body suffered organ failure and it was a 1 in 5 chance of survival but survive I did. It's been life changing in the fact that I don't know when I will recover and am still subject to numerous tests. The doctors won't give me a guarantee on recovery as the illness presented a number of other side effects.

Well now my pay is at half and the car payments are still being taken.

Several questions - my working hours normally are 37.5. Am I still classified as working those hours despite being sick?
My take home pay at the end of the month now is less than the national minimum wage if I was doing 37.5. But as I am off sick am I not classified as doing the 37.5 if that makes sense? My employer says that its not based on NMW but the lower earning level which I think is 107 per week. I am not entitled to housing benefit as my wage is too high and I don't qualify for any other benefits according to various calculators.

My pay will cover my rent for the month and council tax but that's it. I can't even use the car anyway at the moment as I am too poorly but this may get better. But even if I did return it I wouldn't have the money to stump up the early termination fee. Can anyone offer advice because I am at my wits end. Sleepless nights are exacerbating the illness considerably.

Had I known this would have happenned I wouldn't have touched it with a bargepole. At least with a loan I could negotiate an extension until I was able to pay fully again. This just seems mad!

To try to put this as simply as possible for you....You are still contracted to work full-time, but you are not working at all. Now if all things were even you would have a job still, but wouldn't get paid at all. However, in the UK we don't accept anyone having no income at all, so we have sickness benefits. They are not pay, they are benefits for specific unavoidable circumstances. Your employer chooses to give you an additional benefit - occupational sick pay. They don't have to do that, but they do. So none of your income is "salary" or "wage" because you aren't working at all - it is really an allowance because you are sick.

In relation to the car agreement, this is really about what the terms of it are, but I assume that you have checked that there are no get out clauses that cover your circumstances. So the terms of the agreement are what they are, and you signed up to them. So the only possibility then would be "clemency" - to explain the circumstances and ask them to take back the car without a penalty (or to defer the penalty until you are able to return to work) because of the extenuating circumstances.

Darksparkle

NMW doesn't apply to sick pay. Your employer is actually generous in that you get 6 months full pay, 6 months half pay.

The requirement is only to pay SSP which is £88.45 for 28 weeks.

FBaby

How much is the termination fee? What a horrible situation, but unfortunately, this is the risk attached to salary sacrifices, it impacts on anything to do with benefits (maternity pay, redundancy etc...).

At this stage, considering the uncertainty of you going back, I would definitely look at getting rid of the car. Maybe try to negotiate with your employer/car lease company to a payment plan to pay the termination fee?

dippy3103

The six months full & six months half pay suggests to me you may be civil service or local gov. If you are, both have welfare bodies which may be able to help.

morrit

Thanks for the swift responses. Yes indeed local gov. The termination fee is 5 months worth of payments. I have asked the council for clemency that they offer for pregnancy but they have said no. Union matter maybe?
It's a frustrating situation indeed but I didn't know how the minimum wage factor kicked in. If I wasn't paid occupational sick pay I would be able to obtain benefits such as housing benefit etc.
My concern is that I return the car and then in 6 months time I am well again... lost the car. I am awaiting a call from my union about this. It's annoying because a brand new car is sat on my driveway gathering dust... an enviable position to be in no doubt but it's odd that I can lose my house and wordly belongings but still have a car. I never once thought this would happen. If I understand it correctly though in simple terms... I get paid x amount. And a wedge of that is sitting outside whether it is used or not. Is that about right?

FBaby

I have asked the council for clemency that they offer for pregnancy but they have said no. Union matter maybe?

Absolutely, on which legal basis do they allow leniency for pregnancy but not illness?

The 5 months termination fee is very steep but I assume it is in their policy?

My concern is that I return the car and then in 6 months time I am well again... lost the car.

I suppose it's a case of weighing the odds of being able to return shortly and counting how much you are losing currently against what you would lose if you return the car.

glentoran99

FBaby wrote: »

Absolutely, on which legal basis do they allow leniency for pregnancy but not illness?

The 5 months termination fee is very steep but I assume it is in their policy?


I suppose it's a case of weighing the odds of being able to return shortly and counting how much you are losing currently against what you would lose if you return the car.

because pregnancy and illness aren't the same

dippy3103

Union matter for sure... Surely the contract has a clause for extenuating circumstances.

Is the car from a lease company?

Darksparkle

Would ESA CB be an option for the OP?

sangie595

glentoran99 wrote: »

because pregnancy and illness aren't the same

This^^^^

But also I suspect that the "clemency" is for maternity not pregnancy, Having done a quick bit of research on this I can only find one council that has introduced this sort of scheme for a broad range of staff, and that particular scheme costs include insurance for payments during maternity, for redundancy and for resignation, although I can't access the actual terms of that insurance to see what it says. But there is no mention of the insurance covering sick leave.