Holiday Pay and Debts: What Are Your Rights?

Questioner

If there's no room for seizure (on holiday pay) due to the exempt amount, can the holiday pay still be used to pay off debts due to an administrator? My income is therefore lower than the exempt amount...

Questioner

The answer is: Yes and No. No, because the holiday pay you receive from your employer or benefits agency falls entirely into the estate and you are therefore not allowed to keep it. Yes, because you are entitled to holiday pay annually through a one-off adjustment to the Allowable Amount (VTLB) in May or June. Even though you are not allowed to keep the holiday pay you receive from your employer or benefits agency, you will be entitled to extra (holiday) pay in May or June of each year. You won't receive this amount from the trustee, but you will have to pay less to the estate in one of those months because the amount to be released will be higher in that month. How much higher depends on your personal situation. Your trustee will have to indicate how much you are allowed to retain (extra) in that month. If this doesn't happen, you can request the trustee to do so.