Monthly payments

How your payment is calculated

Your monthly IVA contribution is based on your disposable income: the amount left each month after reasonable living expenses have been deducted from your total household income. Your IP prepared an income and expenditure (I&E) statement when setting up your IVA, listing every income source and all allowable expenses. The difference is your monthly contribution. Allowable expenses typically include rent or mortgage payments, council tax, utilities, food, clothing, and transport, assessed against guidelines such as the Standard Financial Statement (SFS).

Income and expenditure assessment

The figures agreed at the start are not fixed forever. Most proposals require an annual review, at which your income and expenditure are reassessed. Your IP will typically contact you around the anniversary of your IVA start date, asking for three months' payslips, bank statements, and details of any changes. It is important to engage with this promptly — failing to respond can be treated as a breach of the IVA terms.

If your income changes

Most proposals require you to notify your Supervisor of any material change in financial circumstances. Do not wait for the annual review if your income changes significantly.

If your income increases, you may need to increase your contribution. A common approach is that 50% of any net income above a threshold must be paid into the IVA. If your income decreases, inform your IP immediately. Until a variation is agreed, you remain obligated to pay the amount in your proposal.

Payment breaks

Most IVA proposals allow your Supervisor to grant a short payment break — typically up to three months — in certain circumstances without requiring a formal variation. A payment break is not automatic. You must request it from your IP and provide an explanation. If granted, missed payments are usually added to the end of the arrangement rather than written off.

Windfall contributions

If you receive a lump sum during your IVA — such as an inheritance, compensation payment, redundancy payment, or prize — you are likely required to pay all or part of it into your IVA. A typical arrangement requires you to pay any windfall above a specified threshold (such as £500) into the IVA, usually within 14 days of receiving it.

Redundancy payments are a common source of questions. Statutory redundancy pay may be treated differently from enhanced redundancy pay, and notice pay can also vary. Your proposal should address this; contact your IP for clarification before receiving the payment if possible.

If you miss a payment

Missing a single payment is not automatically fatal to your IVA. Most proposals allow a limited number — typically three in total — before the Supervisor must consider failing the arrangement. If you miss a payment, contact your IP as soon as possible. If you cannot see how you will continue payments, speak to your IP about a variation. It is always better to address problems proactively.