Monthly IVA payments are calculated by subtracting your normal living expenses from your income. However does your income have to be earned wages or can I do an IVA on benefits? Rather speak to someone? Call 0800 077 6180.

Jump to article contents:

• Is it possible to do an IVA if you work plus get some benefits
• What if your income is 100% benefits
• What if your benefits fall during the arrangement

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Is it possible to do an IVA if you work plus get some benefits

Many people in IVAs have some kind of benefit payment as part of their income. This is especially true for families who can earn working tax credits, child tax credits and housing benefit.

An IVA is focussed not so much on the type of income, but more that it is reliable. The IVA has to be affordable and realistic, otherwise it may fail which is no use to creditors or the debtor.

Income from PIP (Personal Independence Allowance) and DLA (Disability Living Allowance) are also included. The difference with these incomes is that they are allocated to your specific needs, rather than general living expenses. We can advise you on this.

You could argue that income from benefits is more reliable than income from a job. Jobs are at risk of redundancy or reduced hours, whereas income from benefits is easier to rely on when establishing an affordable budget.

What if your income is 100% benefits

After all of your reasonable living expenses have been taken into account you will need to have at least £80-£100 a month left over which you can pay towards your debts. If so you can apply for an IVA even if all your income is from Benefits.

For an IVA to be successful you will need to be able to sustain your payments for the entire agreement which is likely to be 5 years. As such if any part of your wages or benefits income is temporary you should not include this in your income calculation.

If you are unsure that an IVA will be affordable or that your benefits might not continue for the term of the IVA, then rethink. There are other solutions we can discuss with you.

Often seen as the last resort, Bankruptcy is sometimes simply the right choice. If you have lower debts, less that £50 disposable income each month and are not a homeowner you could also qualify for a Debt Relief Order. We can advise you on all these options.

What if your benefits fall during the arrangement

Although we have highlighted the importance of being able to sustain your monthly IVA payments, clearly no-one can guarantee that their income will remain fixed for the next 5 years.

Circumstances change, often in terms of family or employment. This means benefits can change. They could increase or decrease. Remember if you can pay more to your IVA, you will be expected to. If your benefits reduce or you think they could reduce in the near future, call you IVA company straight away.

If this situation were to happen it does not necessarily mean that the IVA will fail. Your IVA company may be able to reduce the amount you are paying each month so that it can continue. However you need to understand that the length of the agreement could be extended to compensate.

If there is a change in your benefits payment, do not delay contacting your IVA company. They will recalculate and if necessary renegotiate with your creditors. keeping in regular contact with your IVA company will give the IVA the best chance of success.