Contingency provision
Clients can have an expenditure of up to 10 per cent of the surplus income calculated, allocated as a contingency allowance or saving provision.
1s16 B(S) Regs 2016 A maximum contingency allowance of £20 a month is permissible for each assessment.
Debt advisers/trustees should consider including the contingency allowance in every case, as it is in all parties’ interest that the client has funds available to meet the cost of unexpected future liabilities.
Example
Harry’s CFT assessment results in surplus income of £100, with no contingency provision. It can be recalculated with up to £10 included in the other expenditure category, resulting in a revised surplus of £90.