Find out what your monthly IVA payment will be

Use this guide to find out how much your IVA payment will be every month.

In addition, get all the information you need about whether your payment could increase during your IVA.

Plus, what happens if you can no longer pay your agreed monthly amount?

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How to work out what your monthly IVA payment will be

Your monthly IVA payment is based on your disposable income – sometimes known as surplus income.

So, what is this amount and how do you calculate it?

Your disposable income is the amount you have left over after all of your reasonable living expenses have been taken into account.

As such, to work out this amount, you first total up all your monthly income. This could be simply your wages or a combination of different types of income (wages, benefits, pensions etc).

Next, you deduct all of your reasonable living expenses. The amount left over is your disposable income.

For example:

If your total income is £1500 and your total living expenses are £1350. Your disposable income is £1500 minus £1350 = £150.

This means that in the above example, your IVA payment would be £150/mth

You have to pay 100% of your disposable income into your IVA.

Are disability benefits included when calculating your IVA payment?

Since the introduction of the IVA Protocol April 2025, you have to include any income you get from disability benefits (such as DLA or PIP) when you calculate your IVA payment.

If you get these types of benefits, you must list them in your income calculation.

However, you can then balance out this income by including a sufficient figure in your expenses budget to cover your disability related costs. This means your IVA payment amount should not be affected.

You can choose to use part of your benefits income to fund your IVA payment if it would not be affordable otherwise. Find out more about this by contacting our IVA experts today.

Do you have to prove your income?

Before you can start an IVA, you will have to prove your income.

In most cases, you do this by providing copies of your wage slips for the last 3 months. You will also need to provide a copy of any benefits statements (such as your Universal Credit statements) for the past 3 months.

If you are self employed, you don’t have wage slips. Instead, you will need to provide copies of your tax returns for the past 3 years.

You will also have to produce a three line accounts forecast predicting your average monthly drawings after tax going forward. You may need help to do this.

We are experienced in assisting self employed people start IVAs. If you work for yourself, talk to us today.

What is the minimum monthly IVA payment?

There is no specific rules regarding the minimum amount you have to pay into an IVA.

That said, this solution is unlikely to be suitable unless you can afford to pay at least £100/mth into the Arrangement.

It may be possible to start with a monthly payment which is less than £100/mth. However, there would be an expectation that your payment would increase over time.

Usually, you would need to provide evidence that this is realistic such as information regarding an expected increase in your income or deduction in your living expenses.

It is not sensible to start an IVA unless you are confident you can sustain the minimum monthly payment.

If you can’t afford a monthly IVA payment, you should consider alternative options such as a Debt Relief Order (DRO) or going bankrupt.

Do you have to include your partner’s income in your IVA payment?

Your partner does not have to pay the debt you owe.

Nevertheless, if you are living with a spouse or partner and you want to start an IVA, you will have to produce a household income and expenses budget.

The budget must include both you and your partner’s income. It must also include your combined living expenses amounts. You use these figures to calculate your household disposable income.

Why do you have to do this? The reason is that you need to be able to show that both parties are paying their fair share of the household expenses based on their income.

However, you do not have to pay 100% of the household disposable income into your IVA. This is because it includes some of your partner’s income, and they don’t have to pay into your IVA.

As such, you split your household surplus pro rata relative to the portion of the total income you both contribute. Your IVA payment is based on your share only.

For example:

If your household surplus income is £300, and you both contribute the same amount of income, the surplus is split 50/50.

In the above example, your IVA payment would be £150/mth and your partner could keep their £150 share.

Your share of the household surplus income may not be sufficient to maintain the minimum IVA payment. In these circumstances, your partner can choose to help you fund a higher monthly payment from their share.

Will your IVA payment ever increase?

Your agreed monthly IVA payment is NOT fixed. It can (and often will) increase during the 5-6 years that the Arrangement is in place.

This is because under the terms and conditions you sign up to, if your income goes up, the amount you pay into the Arrangement can also go up.

In these circumstances, you have to submit a new income and expenses budget and re-calculate your disposable income. If it has increased, so will your payments.

You don’t have to hand over all the extra money you earn. Your IVA will only take 50% of any increase in your disposable income.

For example:

If as a result of a pay increase, your disposable income goes up by £100/mth, your payments will increase by just £50/mth. You keep the other £50 to spend how you wish.

When your IVA payment goes up, it does not mean you will pay the Arrangement off any faster. It simply means that the overall amount you pay increases. Give us a call on 0800 180 8013 to find out more.

Can you reduce the amount you pay if you need to?

If your income goes down or your living expenses increase, it may be possible to reduce your IVA payment.

You must agree any reduction with your IVA company before it can take place.

First, your IVA company will have to carry out a review of your new income and expenses budget.

Where your disposable income has fallen by less than 20% (or 10% if your IVA started before April 25), they can decide to reduce your payment without having to get permission from your creditors.

If it has fallen by more than 20%, your creditors would have to agree a variation.

Where a reduction is agreed, you are likely to have to accept an extension of your IVA. As a general rule, an additional 12 months will be added to the length you originally agreed. In certain circumstances it could be more.

If your circumstances have changed and you can no longer afford to pay your IVA, you should consider cancelling and the option of going bankrupt.