IVA Living Expenses Allowances – 2023 Guide

IVA Living Expenses Allowances – 2023 Guide

Getting your IVA Living Expenses budget right is really important. Understanding the allowances you can include will ensure you can afford your IVA payments.

Included in this article:

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What is an Living Expenses Budget?

An IVA Living Expenses budget is a list of all your monthly household expenses. It includes everything from the amount you pay for your mortgage or rent to your utility bills, food and shopping and transport costs.

Getting the budget correct is critical. The total amount is used to calculate your disposable income. This is what is left from your income after all your expenses are taken into account. It is what you will pay into your IVA each month.

If the figures in your living expenses budget are too low your disposable income will be wrong. The amount you are asked to pay into your IVA will be greater than you can afford and you will struggle with the payments.

Don’t include any amounts in your living expenses budget to pay the debts which will go into your IVA. Once the Arrangement starts, you will stop making these payments.

Struggling to get your head round all of this? We can help. Call us (0800 011 4712) or complete the form below. The advice is free and confidential.

The IVA Living Expenses Allowances

There are various categories of expenses you need to include in your IVA Living Expenses budget. Generally speaking they are either fixed or variable.

Fixed expenses are things like your rent or mortgage, utility bills and child care. They are fixed because they are the same each month. Variable expenses include food and clothing, entertainment and transport. They may change each month depending on what you spend.

When you apply for an IVA your creditors will compare the amounts you include in these categories to their guidelines. Using our guide will ensure you stick within these guidelines and you do not miss anything out.

The categories you can include (and acceptable allowances for each) can be found in our living expenses guide which is free to download.

Do you have to stick to the IVA Living Expenses Allowances?

You may feel the living expenses you need are higher than the allowances suggested in our guide. Perhaps your fuel bills are higher because you drive further than average. There may be someone in your household that has more costly medical needs.

If you are in this position you should include the real cost of the expenditure item. As long as the amounts are justifiable and reasonable they will normally be accepted.

You may be asked to provide evidence of higher expenditures such as bank statements or receipts.

Despite your efforts to justify your expenses, your creditors may reject anything they feel is unreasonably high. If this happens you can agree reductions and a higher monthly payment.

You should not start an IVA unless you believe the payments you ultimately agree are affordable.

Even if you feel you have justified higher or extra living expenses, your creditors do not have to agree to them. If they don’t, you will have to accept a higher monthly IVA payment or consider an alternative debt solution.

What can you do if you get your IVA Living Expenses wrong

It is possible that you have already started your IVA but now you realise that your living expenses budget is wrong. Perhaps you feel the amounts you included are too low or you missed some out altogether.

If this is the case your payments will be more than you can afford. You will then struggle to maintain them. You may even feel the IVA has made your situation worse when it should have become better.

One of the most common reasons for an IVA to fail is that it is based on unrealistic monthly payments.

If you are struggling, your IVA company might be able to reduce the amount you pay. However you may be asked to extend the length of the Arrangement to compensate your creditors.

Need help with your IVA living expenses budget? Get free, confidential advice. Give us a call (0800 011 4712) or complete the form below. 

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6 thoughts on “IVA Living Expenses Allowances – 2023 Guide

    Pete says:


    I downloaded your living expense form which is very useful. However I don’t see any allowance for additional personal expenses such as Xmas & Birthday presents. I have 6 grandchildren. Also entertainment (if only a night out in the pub).

    In addition whilst I rent I still have outlay for decoration , maintaining the garden window cleaner and repairs/ replacement of my furnishings & appliances. I know each IVA is individual but the above costs are normal living expenses. Can these be included ?

    Thank you.

      Hi Pete

      As you say each IVA proposal will be considered on its own merits and taking into account the personal circumstances of the individual in debt. The important thing is that your creditors need to be assured that you are making your best effort to repay them as much as you can during the Arrangement. If they are not then they may not accept your proposal or ask you to up the payments you offer before they accept.

      That said there is a budget for personal entertainment in our guide (under the “Sports Hobbies and Entertainment” section) so that is covered. In addition you can normally include a budget for gifts but this will be limited. You can imagine your creditors saying “I have 6 grandchildren too and I cannot afford to buy them much as I am paying my debts….”.

      In terms of maintenance of a rented property creditors would normally question this as it is generally down to the landlord to pay for maintenance. If you have a requirement in your contract to pay for a gardener / window cleaner then your creditors might allow a specific budget item for this. However if not I think it would be unlikely.

      It is also unusual to be allowed a specific budget for repair/replacement of furnishings & applicances. However there is a budget already included in the guide for emergencies and sundries which is intended to cover these items.

    Dawnie says:

    Hi I am just enquiring and have not made any decision yet. What is the allowance if someone was on an iva can you get an allowance for say Xmas and birthday gifts or are these non essential thanks?

      Hi Dawnie

      You will not normally be allowed to include a specific amount for xmas and birthday gifts in a standard IVA proposal. That said, depending on the circumstances, some IVA companies might allow a small budget for this. If not, there are other areas where a budget can be included to cover such expenses. For example you should be allowed to include an amount for hobbies, leisure and miscellaneous expenses which you could then tap into.

    CraigJ says:

    Is the living expense budget going up for 2022 as the the cap on fuel bills is going up, NI is going up and the cost of living has gone up, plus with russia doing what it is doing the price of oil has just shot up.

      Hi CraigJ

      The living expenses allowances do not automatically rise with general increases in the cost of living (inflation) or changes to tax levels (eg the National Insurance rise). As such things like housekeeping are currently unchanged.

      However it is certainly recognised that specific costs such as energy (electricity and gas) bills will rise significantly this year. As such when completing an expenses budget. I would encourage you to increase these allowances accordingly. If your bills have not yet gone up but you suspect they will, it is not unreasonable to increase the current amounts by 50%.

      More information about the up to date living expenses allowances is available here: Agreed IVA Expenses Amounts

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