Voluntary Redundancy and Student Loan

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 :-)

Replies

  • edited 23 January at 9:27AM
    Andy_LAndy_L Forumite
    12.4K Posts
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    edited 23 January at 9:27AM
    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
  • Curious01Curious01 Forumite
    2 Posts
    First Post
    Newbie
    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.
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