Written by Lizzy on Friday 14 January 2011
Good afternoon and welcome to the fourth blog in this week series. So far I have spoken about a whole host of topics relating to IVAs and today I am going to concentrate on your income.
With an IVA it isn?t as simple as you telling us what you earn, what you spend and what you have left over. As an IVA is a legally binding agreement between you and your creditors everything has to be monitored and therefore proof is required as mentioned in the first blog. In the first blog I explained how we work out your surplus but today I want to go into a little bit more detail with your income and what happens if you earn anything additional as well as going through other types of income such as pensions, benefits and jobseekers allowance.
Although we only use your basic salary for the purpose of calculating your IVA payment any additional income such as overtime, commission or bonuses must be taken into account whilst in the IVA. Whilst we do not take that income into account for the purpose of your IVA proposals you will be required to notify us of any additional income and you would be required to pay a percentage of this into the IVA. You will be required, once in your IVA, to send in your Payslips regularly and your P60 annually so it would always be in your best interest to notify us straight away.
Some of you may no longer be working and will be receiving your pension, whether this is the state pension, pension credits or a personal pension all of these would be used as your income source for the IVA and all of it would need to be included.
If you are working and are paying into a pension scheme you would need to notify us of how much you contribute and we would need to show that you are making the minimum contributions whilst you are in the IVA.
Another popular source of income for many of our clients is from benefits. These benefits include:
*Disability Living Allowance
*Income Support
*Child Benefit
*Child Tax Credits
*Incapacity Benefit
*Working Tax Credits
The majority of benefits can be used to contribute to your IVA income. All of the ones above listed do. However some benefits will not usually be used mainly due to the basis that they are not guaranteed incomes. The main one of these is Jobseekers Allowance; this benefit isn?t guarantee and can only be claimed for a certain length of time. When IVA proposals are drawn up, we have to ensure the plan can be sustained for the whole 60 months and it therefore wouldn?t be in your best interest to use an income that could change or stop at any time.
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