IVA and Work Related Bounus

irishgeal1 · 4 October 2018 at 2:29PM

Hi Guys,

Long time reader 1st time poster. I was hoping someone could offer some help with the following predicament.

I'm currently in the 6th month of my IVA (best decision I've ever made) and l'm on track to get a work related 'bonus' of around £2000 nett in December which will make a huge difference to my standard of living. (essential house maintenance and new boiler).

Whilst I understand I need to claim / show everything to IVA company / administrators I'm wondering what other users experience of this has been.

What may make this different is that my actual salary is £26k and when applying for my IVA, I said my income was approx £28k accounting for possible bonus (as I got one last year.). So my monthly repayment is based on a salary of £28k.

Being honest I am 'afraid' if I raise question this with my IVA company (who have been very very helpful) they will have to 'formally' answer.

Thanks in advance for any advice / guidance.

DorisTrousers · 4 October 2018 at 5:23PM

If the bonus has been budgeted for in advance by spreading it out over the 12 months, which I wouldn't have done by the way as it effectively penalises you for 11 months out of 12, then my own opinion is that you will have to pay only half the difference between 2000 gross and 2000 net, which as the income has been spread out anyway, should not be too great.

PrettyKittyKat · 4 October 2018 at 7:46PM

I would avoid including bonus as a basic pay on your IVA, just for affordability as it isn't guaranteed, however this is already done.

It sounds like your additional monies allowance will be higher because your income stated on your I&E is higher due to including the bonus. Do you have to 10% allowance? If so, multiply the income on your I&E by 1.1, then by 6 months to get the total you can earn in that period before additional monies are due. Add up your earnings in the six months (remember to add on any disallowed deductions) and then subtract the total you are allowed. If you have a positive amount (IE you've earned over it) then half it and call your IVA company on payday to pay that amount in.

There is no reason not to ask your IVA company about this, these are the rules of the IVA, I'm unsure why you would be 'afraid' to ask them or what you mean by the 'formal' answer

foxy-stoat · 5 October 2018 at 11:08AM

You will probably find that half of the net bonus will have to go into your IVA - best keep half of it in a separate bank account and be ready to pay it at the annual review.

irishgeal1 · 5 October 2018 at 2:11PM

Thanks for the advice guys. If it goes toward getting IVA paid off sooner the better.

foxy-stoat · 5 October 2018 at 2:35PM

irishgeal1 wrote: »

Thanks for the advice guys. If it goes toward getting IVA paid off sooner the better.

Doesnt get paid off sooner - it will just increase the final dividend the creditors get.

Your doing the correct thing, it may be an idea though to review your salary on the annual review to reflect your actual wages.

Craig1981 · 7 October 2018 at 6:52AM

best to speak to your IP and see what they say.

But as an annual bonus, you would keep 10% of your normal net income, and pay 50% of the remainder
so if your net monthly income is £2k, on your bonus you would keep £200, and pay half of the remaining £1800.

why speak to your IVA? well, they have your agreement and what is considered to be extra income and included income. worst case is that you will pay 50%

irishgeal1 · 15 October 2018 at 9:57AM

Hi guys just wanted to add an update. I contacted my IVA practitioner about this possible bonus and they told me to contact them in January to arrange a monthly repayment plan over the remaining term of the IVA (4.5 years). This is a minimal increase which works great for me. They also offered the option of paying additional income upfront.

They were very relaxed and knowledgeable about the situation.

PrettyKittyKat · 16 October 2018 at 8:13AM

I would recommend paying additional monies accrued in asap. Although increasing the payments over the long term is an option as it just needs to be paid in by the end of the term of the IVA this means your IVA payment increases and could make it unaffordable. It is very early in your IVA to get behind with paying in your additional monies. If something were to change later in your IVA it looks favourable to have already paid in all your additional monies. It may seem enticing but to help yourself pay in what is due in and use the remainder to pay for your house repairs etc.

IVA and Work Related Bounus

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