Voluntary Redundancy and Student Loan 19 January at 11:48AM in Redundancy & redundancy planning 2 replies 123 views

Curious01

Hi all,

I'm hoping someone may be able to offer some advice around my possible redundancy and student loan.

My organisation is currently going through a huge restructure and is offering voluntary redundancy. If I was to take this I would be getting a package of around 33K.
I have been trying to find out if I will have to pay my student loan payment against my redundancy but so far the Student Loan Company have been giving conflicting advice.

My understanding was the you don't have to pay student loan payments on redundancy under 30K as its none taxable. But as mine is just over this I'm not sure if I will have to pay against the full 33k or if it would just be against the amount over 30k e.g just the 3k.

If anyone could offer any advice I would very much appreciate it :-)

Andy_L

https://www.gov.uk/hmrc-internal-manuals/collection-of-student-loans-manual/cslm17055

"For Student and or postgraduate loan purposes the definition of earnings that are subject to deduction by employers is the same as that used for Class 1 National Insurance Contributions."

"Income not defined as Earnings

Income that is not considered earnings for student and/or postgraduate loan purposes includes the following.

Payments to employee (or ex-employee)

Pensions

Tips paid directly to employee

Payments made after death

Redundancy Payments"

If some of your redundancy payment is made up of pay in lieu of notice than I think that will be subject ti NI & thus student loan

Curious01

Thanks for the reply Andy, that's really helpful.

The voluntary redundancy scheme being offered to me doesn't pay out anything in lieu of notice so don't need to worry about that one.