Can I Earn Overtime With an IVA? How Extra Income Affects Your Payments
Published 6th of November 2012·Updated 30 March 2026
Reviewed by: Reviewed for accuracy April 2026
Yes, you can earn overtime during an Individual Voluntary Arrangement (IVA). However, any extra income above a threshold is not yours to keep in full. Most IVA agreements require you to share a proportion of additional earnings with your creditors. The exact terms depend on the wording of your specific IVA proposal.
Short Summary
An IVA sets your monthly payment based on your disposable income after reasonable living expenses. If your income rises, your payment is typically reviewed and may increase.
Most IVAs include a windfall clause covering overtime, bonuses and inheritances. The standard rule is that the first 10 per cent of any increase above your normal income is yours to keep; anything beyond that is split 50/50 between you and your creditors.
Your insolvency practitioner reviews your income annually during the IVA. You will usually need to provide payslips, bank statements and a revised income and expenditure form each year.
If your income drops, your monthly payment can also be reduced. IVA payments are not fixed in stone; they are meant to reflect what you can genuinely afford.
How does an IVA calculate what you pay each month?
Your IVA payment is based on your disposable income: the money left over each month after your essential living costs are deducted. These costs include rent or mortgage, food, utilities, travel to work, and other reasonable expenses.
The insolvency practitioner who sets up your IVA works out this figure with you and proposes it to your creditors. Creditors holding at least 75 per cent of your total debt must vote in favour for the IVA to be approved. Once approved, the payment figure is reviewed annually to reflect any changes in your income or expenses.
What happens if I earn overtime during my IVA?
Overtime earnings are treated as extra income and are subject to review. The standard approach used by most insolvency practitioners follows this structure:
| Income change | What happens |
|---|---|
| Extra income up to 10% above normal earnings | You keep it all |
| Extra income more than 10% above normal earnings | Excess split 50/50 between you and your IVA |
| One-off bonus or windfall | Treated the same way as overtime |
| Inheritance received during the IVA | Usually paid into the IVA in full or by agreement |
For example, if your normal monthly income is £2,000 and you earn £2,300 in a month through overtime, the first 10 per cent above your normal income is £200, which you keep entirely. The remaining £100 is split, with £50 going into your IVA and £50 staying with you.
The exact figures depend on the specific terms written into your IVA proposal. Check your IVA document or speak to your insolvency practitioner to confirm how windfall income is treated in your case.
Do I have to tell my insolvency practitioner about overtime?
Yes. IVA terms typically require you to notify your insolvency practitioner of any significant changes to your income, including regular overtime. Most IVAs include a clause requiring you to report income changes above a certain threshold.
Your insolvency practitioner will conduct an annual income review in any case. You will normally be asked to provide payslips and bank statements. Failing to disclose income increases could be treated as a breach of your IVA terms, which can have serious consequences including the IVA being terminated and your debts reverting to their original status.
Will earning more money end my IVA sooner?
Not automatically. Making higher payments because of increased income does not typically shorten your IVA; instead, it may reduce the size of your final payments or ensure all creditors are repaid in full before the IVA term ends. Most IVAs run for five or six years regardless of payment levels.
Early resolution of an IVA is generally only possible if you can make a lump sum payment that satisfies all creditors and covers the insolvency practitioner's fees in full. This would require negotiation with your insolvency practitioner and agreement from creditors. It is not something that happens automatically from overtime payments alone.
What if my income drops during an IVA?
If your income falls significantly, your monthly IVA payment can be reduced. Contact your insolvency practitioner as soon as possible if this happens. They can apply to vary the IVA terms, which requires creditor approval. Most insolvency practitioners will seek this variation on your behalf if your reduced income is evidenced.
Do not simply stop making payments or reduce them without agreement. Missed payments without variation approval put your IVA at risk of failure. If your IVA fails, your debts revert, creditors can resume collection action, and any protection your IVA offered against legal action or charging orders is lost.
Frequently Asked Questions
Can I work overtime during an IVA?
Yes. There is no restriction on earning overtime during an IVA. You are free to take on extra work. The consequence is that income above 10 per cent of your normal earnings is typically shared 50/50 with your creditors, as set out in your IVA terms.
Do I keep my full overtime pay during an IVA?
Not in full, unless the overtime brings your income to within 10 per cent of your normal earnings. Beyond that threshold, half of the excess usually goes into your IVA. You keep the other half. Check your specific IVA agreement as terms vary between insolvency practitioners.
What is a windfall clause in an IVA?
A windfall clause is a standard term in most IVAs that requires you to pay a proportion of any unexpected income (overtime, bonuses, inheritances, lottery winnings) into your IVA. The typical threshold is 10 per cent of your normal income; amounts above this are split 50/50.
What happens if I receive an inheritance during an IVA?
Inheritances received during an IVA are usually treated as windfalls. Depending on the terms of your IVA, the full amount, or a proportion of it, may need to be paid into the IVA. Speak to your insolvency practitioner immediately if you receive an inheritance; the terms and timing matter significantly.
Can my IVA be extended if I cannot afford my payments?
Yes. If your income drops and you can no longer afford your agreed monthly payment, your insolvency practitioner can apply to vary your IVA terms. In some cases, the IVA may be extended beyond its original term to allow you to repay more over a longer period. This requires agreement from creditors.
Where can I get free advice about IVAs?
StepChange (stepchange.org or 0800 138 1111) offers free, impartial advice on IVAs and all other debt solutions. They can assess your circumstances and tell you whether an IVA is the right option. Citizens Advice also provides free debt guidance.