10% and 50% of Overtime Question

[andrewgoodman121]

Hi Debbie,

You must have got your IVA at the same time as myself and like me you are most probably treading water as you want your IVA to be successful and DON'T want to see your payments increase.
On this subject there seems to be a LOT!! of conflicting ideas of what it means with the 10% you keep and 50% you hand over as even Carl's version at first differed from Melanies.
What i will most probably do is when i do Overtime and then get my payslip , i will ring my IP and tell them how much of it do i hand over.

I WOULD RATHER BE ON THE SAFE SIDE THAN HAVE INCREASED IVA PAYMENTS!!

It's like an Alcoholic having 100 tins of Lager
for a year and then having to hand over half the tins.

[debbiw]

I'm getting confused with this 10% overtime clause now. Cr15py explained it to me the other day, and i understood it, but it isn't what melanie has just agreed on Carafs post. Help Melanie!

[Lord Soth]

I have this clause in my IVA and I appreciate it can be difficult to work out. I really wanted to give a straight-forward example but I fear this will still be as clear as mud, sorry!

Let's assume a normal take home pay of £2000 per month (i.e. after NI, tax etc) and said overtime for that month is £400 making a grand total take home pay of £2400. The first addtional £200 of overtime(i.e. which is 10% of the normal take-home pay, 2000 x 10%) would be completely retained by you. This is great and very welcome!

Anything additional pay over and above your normal pay plus 10% comes under the 50% rule so in this example, this would mean £200 (i.e. Grand total pay is £2400 less your normal pay of £2000 plus 10% = £2200, so the final sum is 2400-(2000+10%) = 200. So that will mean 50% of £200 = £100 extra to pay into the IVA that month. So, in this example, you would keep 75% of your overtime. The new clause is very helpful if you can get overtime.

[debbiw]

Thanks, Lord Soth - I understand now. Thats fantastic!

[Hull_Tiger]

Can I just make the suggestion that people check their proposal / chairmens report or with their IP before taking any of the above as gospel for their IVA.
My IVA has no overtime / additional income provision. When I checked with my 'case worker' (not my IP) they told me they expect 100% of any overtime / additional income to be paid into my IVA.

[MelanieGiles]

That is excellent advice from Hull Tiger - and really goes without saying that as your own IVA is individually tailored to you that you should make yourself familiar with the terms. My advice was specifially to poster Andrewgoodman, who is a client of mine, and I was therefore able to answer him specifically as I have detailed knowledge of his case.

[debbiw]

I do have the 10% overtime clause! So the info given would be the same in all cases of the 10% clause - wouldn't it?

[andrewgoodman121]

Thanks for that Melanie and it is good advice from Hull Tiger.
It does seem that i have opened up a small can of worms with this subject as everyones proposal
differs.
The main thing is to conclude your IVA and if there is any overtime available it is better for the creditors as well as yourself as it is 50% above 10% for yourself which is good.
It does sound a bit complicated and the worrying thing for any of us IVAers is none of us want to see our payments increase because of not fully understanding the overtime rules in our proposals
as we have to live on a tight budget and any extra will help and i am quite willing to give an extra 50%.
Nobody would do overtime if you had to give back 100% and the creditors would lose out if that is the case for Hull Tigers Proposal.

[Lord Soth]

My apologies. Hull Tiger is absolutely correct, I should have made it clear that my example is only for more recent IVAs which have this specific overtime clause.

I'm sorry to see that some have to pay over 100% - that seems so unfair and where exactly is the incentive to work any overtime?

[ianmillington]

Absolutely, check what's in the proposal and very importantly the chairmans report. As things stand, it all depends on who had the voting power at your creditors meeting. Also because creditor reps have moved the goalposts from time to time so the date of approval can be relevant.

The new protocol refers to a 50/50 split in surplus which to me takes into account increased costs of living. That is basically the GT modification and is to me the fairest one. The TIX one sounds great at first sight. You keep the first 10%. That will probably take account of any increase in the first year but my reading is that once that 10% allowance has gone that is your lot and thereafter it's 50% of any increase in "take-home pay".

Hull Tiger - I know we've had this discussion before. I remain totally gobsmacked that the failure of your proposal to define what you have to pay in can possibly be interpreted as meaning 100%. You could just as easily argue that it means nil. I note from our other discussions that your proposal refers to increased payments "reasonably requested" - are they requiring 100% of your increase in take-home pay? I also note that this is merely the interpretation of your case-handler. I would seek a definition from the Supervisor who might not even know about the situation and, I would suggest, is likely to be far more "reasonable".

Ian

[Hull_Tiger]

Hi Ian,
Yes, they are talking about taking 100% of my pay increase but I am currently waiting for official clarification of my exact situation. I sent them a letter and new I&E not long after we had that discussion and so far, they have not replied. I should get my first full improved wage packet sometime next week so I am quite anxious to get it sorted.
I asked them in my letter to
(a) Advise my new monthly repayment and
(b) Clarify the situation with Pay Rises/OT etc.

In terms of speaking to my IP, I never have! I put this down to using one of the 'bigger' firms which, having now found this forum, I regret doing.

[ianmillington]

Good - let us know how you get on please Shaun.

Given how alive you are to the situation can I assume you are sticking the money to one side to avoid the problem of a retrospective claim for increased contributions?

Ian

[OPTIMIST12]

My IVA proposal / agreement is pretty clear on this. Overtime and Bonuses - 50% paid into IVA and 50% for me.

BASIC PAY INCREASE - to be reviewed by IP / IVA Company. Allowance made for inflation and any definite and provable increase in expenditure. Remainder to be paid into IVA.

I am mighty jealous of people with this 10% / 50% concession. Is not the whole premise of an IVA that you pay in the maximum possible after deducting agreed expenditure from agreed monthly income? The EXCEPTION being Overtime and Bonus if you have this agreed in your proposal?

To be honest I am quite happy with this - my understanding has always been that I will pay in the max after being allowed my monthly outgoings with OT as a sort of "Bonus". Curious where this variation started that IVAers keep 50% of increased basic income over their agreed I + E??? Is this not depriving creditors of additional funds that should correctly go to them?

[goulda]

Hi debbies

I am in the same situation as you. I have no mention of pay rises or overtime in my IVA, Chairmans report or otherwise. At my last review my IP decided I had £117 surplus after Income(his calculation) and Expenditure (my calculation) were taken into account. I paid 50% of the surplus into my IVA and was allowed to keep the rest. My firm is, or was, Debtmatters so whether my new IP calculates my payment the same as Debtmatters is, I guess, a case of wait and see. Perhaps our dependable experts have an opinion or any suggestion on how a new IP will operate and if the conditions of my IVA can be amended or altered to incorperate any overtime clause.

[ianmillington]

Hi Goulda

If you have GT as your IP then I would expect them to base it on your surplus income.

Ian