It’s an IVA overtime salary bonus

posted by in Living with debt

This page contains information about debt solutions available in England, Wales and Northern Ireland. Debt advice in Scotland involves similar but different solutions. Before considering an IVA as a debt solution, please make sure you fully understand the risks involved. Please visit our website for more information.

Overtime? Bonus!

Overtime? Bonus!

An IVA can be an effective solution when you’re struggling with unsecured debts.

The secret to keeping on top of an IVA is to stick to your budget and keep a close eye on any overtime, or bonuses or increases in your salary.

 

Wages and IVA terms and conditions

We all love it when we get a pay rise or a bonus. Even small incremental rise can be cause for cheer; after all, as the supermarket chain says, every little helps!

Because you’re subject to an IVA you have certain responsibilities with any pay rise or bonus.

The standard terms and conditions of most IVAs state something like:

Where you are employed, 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. Disclosure to the Supervisor must be made within 14 days of receipt and 50% of the amount (over and above the 10%) shall be paid to the Supervisor within 14 days of the disclosure.

Let’s make this simpler…

I’m not good at maths!

You’re allowed to earn 10% more than we listed as your income in your IVA proposal.

Above the 10%, you’re allowed to keep 50% of whatever you earn on top of the first 10%. The rest has to be paid into the IVA.

What’s really important is that if you do get a pay rise or receive overtime, commission or a bonus that takes your wages above the 10% extra threshold you should contact us straight away. Many IVA proposals state that failure to disclose any such overtime, bonus, commission or similar by you will be considered a breach* of the IVA.

If you are unable to pay the additional income into the IVA and supply an acceptable explanation to remedy the breach your supervisor will convene a meeting of creditors to vary the terms of your IVA.  If you do not respond to the notice of breach or you are unable to offer additional payments your IVA may be terminated.

The good part

The good part is that there is room and encouragement in your IVA to go for overtime (essentially even if you go over the 10% you still get to keep tidy amount of anything extra you earn). There is also a genuine reason to go after commission and hit your targets at work.

Creditors have agreed to write off some of your debt but you won’t be punished if you do overtime, work harder, or try your best. Just remember to tell your IVA caseworker if you get a wage packet that’s more than 10% larger.

*A notice of breach gives you one month to pay in the additional money you have earned and explain why you failed to disclose it.  For more information on breach see part IV of the standard conditions to your IVA.

Matthew worked as an IVA drafter prior to working in social media. In a former life he wrote scripts for Eastenders, Emmerdale and Hollyoaks. He has 3 chickens, 2 dogs and a rabbit.

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  • kesapathy

    I am currently in an IVA agreement, I do work over time and appreciate the message explaining the circumstances regarding working over time. I was just wondering that if I claim PPI, i understand that this would need to go towards my IVA agreement but I was just wondering would it make the time at which my agreement is meant to finish become sooner? I.e my original IVA agreement is to end in 2014, if i were to get PPI and put the money towards my IVA could my payments stop at 2013?

    Thank you

    • Hi and thanks for your comment.

      We’re pleased that you find the articles useful.

      If you have been mis-sold PPI and you do reclaim it wouldn’t change the term of your IVA but it could increase the final dividend to creditors.

      It’s important that if you do reclaim PPI you should do it for free, this blogpost explains how to do it –

      http://moneyaware.co.uk/2012/05/can-i-reclaim-ppi-while-on-an-iva/

      Every IVA is different so it would be worth speaking to your caseworker if you want some specific advice.

      I hope this helps.

      • king raja

        Hi I work in a cotton wool company tht makes my bouns working with my hourly pay an over time.. thy not giving me full pay rise an overtime pay rate thy work it with the bouns but I have told them if am entitled to bouns thn give it me or just give me my full payrise an over time rate but thy say we work it like that an that’s how its going to stay but if I raise it to them that just give me full pay rise they just say this how it works an we not going to change it an thy even put my holiday pay in my wage every week but thy didnt ask me or make me sign any agreement paper thy do it there way an when I ask them to give me the way u make my wage up an how all this works they tell me if u don’t like it u can go an be hard on me…Please can u tell me if this is right the way they work it out please..an whn I ask my boss how does bouns work in a cotton mill he says it same as a restaurant tips please can u help me on this…

      • moneyaware

        Hi Jaffer, thanks for getting in touch.

        I’m very sorry to hear about this difficult situation. This is not something we could advise on unfortunately. If you feel that you are being treated unfairly by your employer, the best course of action may be to visit your local Citizen’s Advice Bureau who may be able to give you some guidance on where you stand on this. You can find your local CAB via their website: http://www.citizensadvice.org.uk/

        Best regards

        Rachel