There are a number of reasons why your childcare costs may change during an IVA. If this happens your monthly payments may have to be revised either up or down.
- The allowances for childcare in an IVA
- What if you have a specific change in childcare costs?
- What if childcare costs rise generally?
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The Allowances for Childcare Costs in an IVA
Allowances for childcare costs are included in various different parts of your IVA living epenses budget. First and foremost you will need to ensure you include a sufficient amount for food and clothing for each child.
Depending on the ages of your children you can also add budgets for pocket money, school dinners, school trips and transport to school where required.
The allowances for all of these types of expenditure can be found in our living expenses guide.
In addition you may need to pay for nursery or child minding. Your children may also attend breakfast and after school clubs. Where this is the case these must be included in your budget as well.
Childcare costs differ from family to family. You need to include a sufficient amount in your living expenses budget to cover all the costs you incur.
What if you have a specific change in Childcare Costs during an IVA?
Your childcare costs may rise while you are in an IVA. This will clearly happen after the birth of a new baby. However specific costs can also increase as your children grow older. One example of this is if your children start school and you need to start buying uniforms.
In these circumstances it may be possible to reduce the amount you pay into the Arrangement. However you cannot simply make this decision yourself.
Your IVA Company will have to carry out a full review of your income and expenses budget. If your disposable income has fallen it may be that you can continue paying your IVA at a reduced rate. In these circumstances the number of payments you make is likely to be extended.
Childcare costs can also fall during your IVA. As they grew older your children may no longer need after school care. Alternatively they may leave home or go into permanent employment. As a result the amount you have to pay into the Arrangement may rise.
If your childcare costs fall during your IVA your payments are likely to go up.
What if Childcare Costs rise generally during your IVA?
During the course of your IVA (which can last 5-6 years) you may feel that childcare costs are generally increasing. This is not due to a specific change in your circumstances but simply because the price of things like clothes and nursery care are going up.
Where this is the case you may find it increasingly difficult to maintain your IVA payments. However in this situation your IVA Company is likely to be more reluctant to help you by agreeing to lower them.
Having said that if you find yourself in the position where you are struggling to pay you must speak to your IVA company. They may be more inclined help you if the only alternative is the failure of the Arrangement.
Your IVA payments cannot normally be reduced because of general increases in the cost of living. It usually requires a specific change in your living expenses.