There is a promotion opportunity arisen at work of which I have applied for. It is approximately £5,500 more per annum and that is just in the 1st year as it rises by £600-£700 per year until the max of the scale is reached. Would the IVA take all of the increased earnings or does it work just like the overtime ruling where you can keep the first 10% and then anything over you have to pay 50% into the arrangement.
Also is this only effective from your annual review time or do you have to call the IVA company to declare increase in earnings when it becomes effective from?
Depends on your IP. some go from next review, others from first pay. Some let you keep half of any increase as an incentive, others seem to want every penny! Hard to say. Check with your ip, hopefully you can keep half at least. Good luck. Even if it's all handed over, long term it's better. Ivas don't last forever!
You will lose 50% of any net increase to the IVA (no 10% disregard). Usually this extra is taken from the date of the review following the raise, although there are instances where the proposal has been drafted in such a way as the rise is captured immediately. Check what your own paperwork says, as some IP's do try to get the money early contrary to the agreed terms (usually down to inexperienced case workers).
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Hi so-silly - as Foggy says you need to check your proposal and any modifications set as to what will apply. Most IVAs have a clause of 50% of the net increase to be paid into the IVA pot. Good luck with the interview!
Any promotion is usually addressed at the annual review and payments increased going forward by 50% of any additional surplus income. If the promotion leads to increased costs for travel, laundry etc these would be allowable before any uplift is calculated. You are obliged to inform your IP of any significant changes in circumstances and if the promotion leads to a substantial increase then it may be worth advising the IP at the time and having a review done. It does depend on your actual proposal but regardless if you get the job you will be better off. Best of luck with the interview.
Thanks Lisa. Thanks Michael. I am with McCambridge Duffy, your firm so would this be addressed at review time then or is £5,500 per annum classed as a significant increase and therefore I should advise my IP as soon as the promotion takes effect (if I am successful of course).
It is always worth keeping us informed. A £5,500 increase would equate to about £300 per month net and if you do a review when you get the job then any extra expenses can be allowed for. This may lead to an increase of 50% of the additional surplus but your base for the 10% 50/50 rule will increase by £300 so if you get overtime and bonuses this would work in your favour.
Usually these things are picked up at review as payrises are outside the 10% 50/50 rule but getting the review done early often leads to no increases in contributions but the threshold for overtime increases.
I think so Michael so if its approx. £300 net I would pay approx £150 extra into the IVA pot which is 50% of the net increase. Its very rare I do overtime or get bonuses but that's helpful to know.
I haven't had the interview yet so don't know if I will be successful but its useful to know if I am.
Any increase in contributions would be after increased expenses. Therefore if your expenses have gone up or do go up because of inflation or even the costs of the new job this is deducted. For example if the new job means you need extra childcare, travel, smarter clothing etc and other expenses have also gone up then the £300 could drop to £200 or less. Your payments would only go up by 50% of what is left so £100 or below.
