www.iva.co.uk

I’d appreciate any thoughts anyone might be able to offer on what appears to be a shifting of the goalposts on my IVA.

A few months ago I took on a second job. It’s at a pub I used to work at part-time and they asked me if I’d like to come back for a bit, so I said yes. It’s generally on an ‘as and when’ basis, so I can go for weeks without a single shift, then perhaps do a couple over a weekend then nothing for a couple of weeks, then a burst of shifts over a couple of weeks. It’s paid monthly, so my earnings fluctuate depending on the hours I’ve worked, and generally they’ve been well below the threshold where I have to make extra contributions towards my IVA.

Of course, I’m aware that if what I earn from the second job exceeds 10% of my earnings from my main job, I have to pay 50% of the difference towards my IVA, and I’m more than happy to do that. I discussed it with my Relationship Manager at my IP, and as I send him my bank statements and wage slips every month, he was quite happy for this to be handled on a month-by-month basis as my shifts at the pub, and therefore what I earn from doing them, fluctuate. As yet, I haven’t been required to make any extra contributions. It’s been useful as I’m a bit better off and I have the flexibility to be able to turn down shifts if I’m unable to do them, so it’s a handy arrangement.

My six month review was done a month or so ago, and everything was fine, no changes were required at all.

And then, from out of the blue, I took a call a couple of days ago from someone at my IP (not my Relationship Manager) who told me that she was about to submit a report to my creditor (I only have one), and had been going through the statements I’d submitted. She’d added up all my earnings from my second job and calculated a monthly average from them, and told me that my monthly IVA payment was to increase by £53 as the average figure she’d calculated took me above the 10% threshold.

This was news to me. As we all often do, I thought of all the things I should have said after the call had ended. But I did point out that my extra earnings fluctuate and come below the threshold, and that this was something I’d discussed in detail with my RM, but she told me that calculating them as an average was the ‘fairest’ way to present them to my creditor. I had the impression that this change was happening independent of my RM and wondered if he was even aware that it was happening. But I didn’t want to appear argumentative or uncooperative.

After the conversation, I had the feeling of having been railroaded into something I hadn’t necessarily agreed to, and wondered why this change had been implemented so soon after my six month review had concluded that no changes were necessary.

The situation it creates is this: My second job earnings fluctuate from next to nothing to just under the threshold. An ‘average’ sum is not representative of what I actually earn each month, and the extra £53 I’ve been told I must pay each month (regardless of what I have or haven’t earned) potentially makes me worse off each month because I have a second job, which defeats the object of having it. It may be better for me to quit the second job just so my monthly payment can revert to what it was, which would be a bit daft.

I contacted my RM and he said he would look into what’s happened and get back to me as soon as possible, which made me further suspect that this was as much news to him as it was to me. A worrying and unwelcome development.

Any thoughts?

My thoughts are that if this is how they are going to treat ad hoc extra earnings from a second casual job, I would be giving that work up moving forward. I would be interested to see how they calculate bonuses then, if you received a one off bonus of £1k one month, would they calculate that as an average over the year? my guess is they wouldn't and would want it all.

In my opinion they are wholly wrong to treat unguaranteed income in this way and I would be fighting it

Thanks for your response. Very helpful, and pretty much what I’m thinking too.

I’ve not heard back from my RM yet so I don’t know what he’s been able to find out. I have received a letter confirming the payment increase, which comes into effect at the end of next month. My RM has always been extremely helpful and understanding and I’ve always felt that he’s completely on my side, which after reading of some people’s experiences here is not always the case. The person who called me the other day, whilst perfectly pleasant, was very matter-of-fact about it all, presenting it in a “this is what is happening” way, which caught me off guard. I wondered if there’d been a change of personnel, or if she was someone at my IP who had simply taken it upon herself to review my IVA and make decisions that she really shouldn’t. I’m sure my RM will be able to shed some more light on it and hopefully reverse the decision.

I was considering leaving the job anyway, as there’s just been a change of management and I’m not sure they’d allow the ‘as and when’ arrangement to continue – I certainly can’t be committing myself fully to it on top of the regular 9-5 Monday - Friday as I simply don’t have the time or energy and nothing’s worth making yourself ill over. What’s irksome about this change is that it makes the decision for me for reasons that make no sense beyond a tidy balance sheet for whoever it was who called to present to my creditor. That and the fact that it allowed me to start setting a little aside towards a couple of things I need to do, which will now be swallowed up by the payment increase.

On a lighter note, I’ve got cake.

I’ve had an update.

The call from my IP took place without the knowledge of my RM, as I suspected. He’s looked into it, and what it comes down to is an annual report that has to be submitted to my creditor. I wasn’t aware that there was an annual report – I thought there was a review every six months (which took place a few weeks ago) and a report on that review, but evidently not. I’m sure it’s all laid out in my agreement if I have a good look at it. It’s evidently a different process to the six month review. My RM has sent me a lengthy email explaining very clearly how it all works.

This time last year, I didn’t have the second job, so there was no second income to take into account, so no need to contact me to inform me of changes to my payments after an annual review had been carried out, because none were required.

What is slightly unsettling is that this process was carried out without the knowledge of my RM, which I’ve raised and I’m sure he has too (given the amount of work he’s had to do to get to the bottom of it and come up with a solution), as the finer points of how my income from my second job fluctuates would have been made clear to the person doing the report if they’d actually bothered to speak to my RM.

Anyway, the long and the short of it is if there’s no basic or standard amount to include as a second income, they have to calculate an average. I had no problem understanding that, but I did have a problem understanding how it could be implemented fairly if the amount fluctuates, and an extra payment of £53 a month was not a fair figure. This is where it would have been useful for her to consult my RM before submitting a report and implementing an increase.

My RM has told me that, although he would like to continue to assess my second income using the 10% rule that’s been used so far, the rules of the IVA do not allow him to continue to do so now that the annual report has shown an increase in earnings. So, taking into account everything I’d told him about this increase potentially making me worse off for having a second job, he came up with two options – either leave the job, which would have everything revert to normal; or, having explained the position to the IP, who has agreed to the average being recalculated based on the fluctuation of my monthly earnings and come up with an increase of £15 per month, stay on there and pay the extra £15.

Now, I can understand the need for the second income to be taken into account, and I’m quite happy for it to be incorporated into my monthly payment. So my RM’s recalculation makes far more sense to me, and in all honesty I’d prefer a slight increase to my monthly payment (as opposed to the original proposed increase of £53) than having to figure out each month whether or not I need to make an additional payment. It’s manageable whether I have a busy month or not, and I guess it reflects well on me to be happy to do that as far as things go with my creditor.

Of course, if I leave the job (which I’ve been thinking about doing), it’s the first option.

So, panic over. Now the whole thing has been explained to me, I’m satisfied with the arrangement my RM has come up with. I think the biggest issue to have come out of this is a lack of communication at my IP – if the person preparing the report had only informed my RM that she was doing it, things would have been very different, I would have been spared the annoyance of the goalposts evidently being shifted, and my RM wouldn’t have had the headache of finding out this had happened without his knowledge and the resulting extra work of having to figure out a more workable solution.

Still, at least it’s all been sorted before the weekend and I don’t have it hanging over me. Have a great Bank Holiday, everyone.

Phew -- I hope that you still have some cake left, Rick

Thanks! As a precaution, what with it being a Bank Holiday, I made sure to buy some more just in case...