What happens to compensation with interest for incorrect pay ?

[kallis3]

10%/50/50 means that you when you esrn overtime etc you can keep the first 10% over and above your normal pay and then anything over that is split 50/50 between you and the creditors.

[MelanieGiles]

Nickjohn - I don't understand your question sorry. Can you clarify this please.

[footiemad]

Hi Nicola - sounds like a good result and a fair one - good news x

[Olivia Young]

Hi Nicola that's great news [:)]

[nickjohn]

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by MelanieGiles

Nickjohn - I don't understand your question sorry. Can you clarify this please.

Hi Melanie, just seen your reply today sorry for not replying quicker..
It was a general point of interest question I had based on the back of the original post..

The original post is that they were getting back pay, compensation and interest and were being allowed it on the 10%50/50 basis.

My question was why is back pay allowed for on the 10%50/50 basis and not classed as either a windfall or asset and 100% paid into the IVA, like a PPI reclaim. My understanding of PPI reclaims is that all are classed as an asset, even though it is only wages the same as back pay, and 100% of this must be handed over to the IP.

Its not as if a PPI reclaim is some form of physical asset which is sold like a car / caravan / motorbike etc its wages which have had tax and NI deducted and money, like back pay, which would have been used to pay off some of the debt at the time...

[kallis3]

I have never had to pay any back pay to my IVA.

It won't be classed as a windfall - it is money you would have been paid when the pay award or whatever is agreed, it's part of your wages.

[nickjohn]

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by kallis3

I have never had to pay any back pay to my IVA.

It won't be classed as a windfall - it is money you would have been paid when the pay award or whatever is agreed, it's part of your wages.

my understanding on windfalls is that it is any money which was not expected e.g. lottery win, gambling, bonus from work, overtime and back pay and must be detailed to your ip and they can take some of it, my understanding from the forum is that the 10%50/50 rule usually applies..

[Foggy]

Nick, a windfall is generally non work related income: lottery win, inheritance, bet win. And is payable into the IVA according to your proposal obligations. Work related income, such as overtime, bonus payment, etc, is dealt with as extraordinary income and falls under the 10% / 50/ 50 rule (or 50/50 if that is your lot).

[nickjohn]

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Foggy

Nick, a windfall is generally non work related income: lottery win, inheritance, bet win. And is payable into the IVA according to your proposal obligations. Work related income, such as overtime, bonus payment, etc, is dealt with as extraordinary income and falls under the 10% / 50/ 50 rule (or 50/50 if that is your lot).

Hi Foggy this gets me back to my original point of interest.
Why is back pay not handled the same as a PPI reclaim.. Both are large sums of cash which have been earned through work and have both been subject to tax and NI and have both been held (for want of a word) by a third party, on the one hand an employer who who never paid it for whatever reason the other a bank or similar who took it when they should not and then paid it back..

Another thing to think of is what would happen if the employer had held onto back pay until after the IVA ceases what would happen then..

[kallis3]

As Foggy states - back pay is not classed as a windfall. A bonus is also not classed as a windfall and will be subject to the same 10%/50/50 as wages.

If it had been paid from day one, would it then have been counted as a windfall? Are you also saying that overtime should be classed as a windfall?

I will also argue that a PPI claim is not earned through work. It is something you signed up to when you took out credit.

[Foggy]

A PPI reclaim has not been directly earned through work, although I think your point is that the monies paid into the PPI were from your earned income. On the same cbasis, if that arguement were applied, an inheritance should be looked on as earned because the donor earnt the estate in their lifetime!

Your question regarding back pay after the IVA has concluded is an interesting one. I imagine, if you knew of the payment prior to the IVA being concluded, it would be captured. If it came out of the blue afterwards I would hope you get to keep it as the IVA would have been formally completed and you'd be released from it's obligations. .... but I could be wrong !

[nickjohn]

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by kallis3


I will also argue that a PPI claim is not earned through work. It is something you signed up to when you took out credit.

Hi Kallis3,
My point on the PPI is that the money you get as a PPI reclaim is only the money you paid into it, when you have a loan / credit card etc. then all the money paid into has to be earned by you in the first place, it is you wages..
Therefore the reclaim is not money someone is just giving you, it was earned by you in the first place and paid to them, they are only giving you your own money (wages) back..

[nickjohn]

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Foggy

A PPI reclaim has not been directly earned through work, although I think your point is that the monies paid into the PPI were from your earned income. On the same cbasis, if that arguement were applied, an inheritance should be looked on as earned because the donor earnt the estate in their lifetime!

Your question regarding back pay after the IVA has concluded is an interesting one. I imagine, if you knew of the payment prior to the IVA being concluded, it would be captured. If it came out of the blue afterwards I would hope you get to keep it as the IVA would have been formally completed and you'd be released from it's obligations. .... but I could be wrong !

Hi Foggy,
I am finding it hard to explain what I mean, I understand why you think a PPI reclaim has not been earned through work but I don't agree with that..
All the money you get back from a PPI reclaim is money you directly earned, it is your own money they are giving you back it is not money the bank are just giving you as, say, compensation. When you take out a loan it says £x's will be the PPI so you earned the money and paid it to them, now it has been proved via misselling they should not have taken this money from you and have to give it back so they are doing..It was all originally your money earned through your own work / wages..

An inheritance is money given to you by a third party, you have not earned it or paid tax ni on it so it is a windfall..

[kallis3]

I think we are going to have to agree to disagree on this one.

[kallis3]

Actually, I think PPI is classed as an asset, not a windfall but I do stand to be corrected on that.