10% 50/50 - can you explain what this is please?

[jemma]

Hi
I am in my third year of my IVA. I got a pay rise in September and my review is in March. I've been reading on the forum about 10% 50/50 - can you explain what this is please? My income since September has risen so on paper, my monthly wage has increased by £200.
Thanks

[Foggy]

The 10% 50/50 rule applies to overtime and bonus payments from work. Some people do not get the 10% but just 50/50, depending on which clauses they have.

The 10% is the amount you are allowed to keep and is the amount equivalent to 10% of your usual baseline salary each month. After than the rest is split 50/50 with the IVA.

So, say you earn £1800 per month and get a bonus / overtime of £350 ........ 10% of the baseline salary is £180 ... you keep that and then split the rest (£170) 50/50 --- you pay the IP £85 and keep the other £85.

So, of the £350 extra income you pay over £85 and keep £265. You have to inform th IP each month, as and when you get extra income and pay it over within 14 days, unless otherwise agreed.

Contractual (permanent) pay rises are dealt with differently in that you get to keep the lot until the review following the rise (assuming you have the usual clauses) and then, after the review half of the increase is added to your regular IVA payment and you keep half. You do have to inform the IP when you get the pay rise, otherwise they will think it is overtime !