www.iva.co.uk

I am in the process of going through collecting my documents for an IVA and hopefully get a successful case together. I have two kids, one who is nearly 3 and another who is 4 months. My wife is currently on Maternity leave but will be going back to work as of June. Up until now, we haven't been paying childcare costs in terms of Nursery fees, etc. for my older child, but my parents and mother-in-law have been sharing the duties of looking after her during the week and we have paid them some cash on an ad-hoc basis for costs like taking her out, food, etc. However, now they will have two to look after, it will be more stressful for them and will be more costly. They have asked for us to contribute money on a monthly basis, not for looking after them as such but to pay for nappies, food, taking out costs, etc. They have said approx. £250 per month to each for caring for them. However, as they are not registered carers and we are not paying them a wage but more contribution to support them, will this be ok for an IVA? At approx. £500 per month, it is still much cheaper than probably £800 per month for each child to put them in a nursery. My only worry is that as this is not a formal agreement, it may not be allowed for income and expenditure. HOWEVER, if it isn't allowed, there is no way we could afford to have an IVA and put them in a nursery as the creditors would get nothing back.
Advice is welcome!

Hi,

I haven't a clue where you would stand with this I'm afraid, just bumping it back up to the top for one of the professionals.

I cant see creditors being too willing to accept that grandparents would want £500 per month for childcare. I understand that its cheaper than a nursery but maybe you could make it a formal agreement rather than an informal one??Maybe easier to accept for creditors.I could tell my creditors that I pay my parents £200 a month to look after my son,without proof,they are not likely to accpet this,hope you see where I am coming from.
Ask the IP who you are going to use if they think it would be acceptable,after all its them who will be trying to get it past your creditors.

Good luck.

Paul

Difficult one this - no problems with the cost of materials, but paying Grandparents is a bit iffy. Most grandparents would relish the chance of looking after their grandchildren. Discuss position with your chosen IP and let us know what he/she says.

Hi
It is a difficult one.
You can see both sides of the coin on this one.
On one side it is cheaper to use family rather than a registered childminder, resulting in more disposible income available to the creditors.
On the other side your creditors may think that this money is not actually getting paid over and is reducing the disposible income available to them.
I would hope that trust is offered by your creditors on this one in return for your honesty
Regards

as a registered childminder of many years you do need to know it is actually illegal to care for a child for more than 2 hours per day and receive payment for.....if you are not registered with OFSTED

not sure if IVA Ips actually check out whether the childcare providers are legal or not

I cannot see the difficulty from an IP perspective, as it is perfectly reasonable to expect grandparents to be paid something towards their services, given that creditors would benefit from the resultant saving over external support.

However, Moretolife throws up an interesting issue which is bound to cause concerns of a differen nature, and I suggest that you check this out before proceeding. I am not too sure how difficult it would be to get registered - perhaps MTL can expand on this point for us.

The other thing to bear in mind is that this money would form additional income for your parents, which could give rise to a tax liability for them. Again, best to check this out as well so you do not fall foul of HMRC as well.

Its_a_long_road may wish to confirm here, but I gathered from the original post that the monthly payment is only expected to cover the expenses involved with the child care e.g. food, nappies, outings etc..?

If that is the case then I can't see why it would be classed an employment and subject to registration or for income tax! Do you think this is a valid perspective and would the £500 for purely expenses still be deemed reasonable to creditors?

Cheers

Andy

I personally cannot see creditors wearing that sort of cost for food, nappies and outings to be frank - when the IVA proposal provides for a housekeeping budget and social and entertainment - albeit both figures are meagre in my opinion.

And as the original poster is comparing the cost paid to the grandparents with commercial childcare, I have made a similar comparison.

Thanks for all the replies, advice is really appreciated. Don't get me wrong, I totally understand that grandparents would relish the chance to look after grandkids but having two of them from 7am till 7pm on most days is a long shift, especially as my mother-in-law would look after them on her own. My parents both don't work due to health reasons and just about get along on their benefits. So its unfair for me to let them pay for expenses for the kids as well. They are not recieving payment for looking after them so its not earnings, it a contribution from us to make sure the granparents are not paying for anything towards looking after them. If we weren't able to do this, we would need to tell them we are in an IVA and thats something we do not want to do. Also, it would more than likely mean going them to a Nursery but then an IVA is impossible. My case is actually with Melanie and I am in the process of getting all my paperwork ready for this but this part is stressing me out at the moment!

I can understand how stressed this is making you, and fully appreciate how expensive kids are.

I would recommened though that you discuss this with Melanie's office as they are the ones dealing with your IVA and can advise you as to how much expenses to put down.

Thanks, I have already pointed this out to someone at melanie's office but they have said its something that needs to be discussed directly with her, as it's quite a difficult issue.

Hopefully Melanie sorts it for you - keep us advised please.

I may be unable to tie up your forum name to your real name, so if you give me a call at the office tomorrow we can discuss further.

I totally understand that Melanie and I wouldn't divulge my name on here anyway. I was only pointing that out and I thought it would be part of our discussions once I got all my paperwork to you. If you feel it can be discussed earlier, that would be ideal. I am out of office tomorrow, is Thursday ok for me to call? I have discussed with parents about a smaller figure so hopefully a solution can be found!