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Scottish Trust Deed Forum
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Topic starter
20/06/2019 2:10 pm
Hi,
My wife and I are in separate Trust deeds, just for clarity.
My wife was made redundant in January 2019. It was considered voluntary, but had she not taken it, it would have been compulsory.
After contacting the IPA, they allowed her to retain roughly six months salary (a shade less in reality) in order to support herself whilst she looked for new employment.
6 months on: she's remained unemplyed. this is not for lack of trying. The IPA requested the last of the voluntary package this month, leaving my wife with around £800 and no income.
I'm in secure employment, but my salary does not cover both trust deed, plus household bills. We live lean as it is, as we'd expected going into a trust deed.
My question is this: I fully understand that the Trust Deed is entitled to take some even all of a severance or other windfall, the problem here is can that occur if it will lead to the Trust Deed failing?
At this point, they've offered my wife a payment break, but my salary will not extend to cover both deeds and bills, which potentially is going to lead to both deeds failing.
is there any action that we can take, or is this a like it or lump it sutation?
20/06/2019 4:42 pm
Welcome to the forum drae1984.
The amount someone would usually be able to keep from a redundancy settlement would be the "statutory" element. This is the amount that the employer must pay their employee by law.
Often people receive an extra sum of money, perhaps because the employer wants to encourage people to accept redundancy, or perhaps via negotiation of some sort. A trust deed would usually collect in this non-statutory sum.
Your trustee will not want the trust deeds to fail, so a payment break (to allow further time for your wife to find new work) might be an appropriate solution. This makes it more likely that everything can get back on track in due course.
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21/06/2019 7:42 am
The amount that is required to be paid into a Trust Deed each month should not be set in stone and just as it could be increased if circumstances improve it should also be able to be reduced. It is definitely worth talking it through with your trustee and finding an agreeable way forward such as a payment break.
If the redundancy was involuntary then I would be saying that the trustee really is duty bound to allow a break, or reduce your contributions. However, as it was technically voluntary then they could argue that the situation is self-inflicted and be less willing to be flexible.
It really comes down to how reasonable your trustee is willing to be, though I'd be surprised if they weren't willing to allow some further leeway and a break in payments to allow further time for new employment to be found.
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