Our policy on variable income is changing – so we could help more of your clients

We’re making things easier for you by letting you know about some important changes to our policy on variable income, which includes bonus, overtime, or commission.

We’ve reviewed our policy following your feedback, and changes to our acceptance criteria on variable income take effect from 16 August 2021.

What are the changes?

  • For regular variable income, we will now only require 12 months’ worth of evidence and we will accept up to 100% towards your client’s income calculation.
    • For example: if your client receives a quarterly bonus, where a similar amount is received every quarter, this can be verified with 12 months’ worth of evidence (such as their latest P60 and latest payslip showing the income), and 100% can be used.
  • For non-regular variable income, we will require two years’ worth of evidence and we will accept 50% towards your client’s income calculation. Or 100% may be accepted where it is established that the income is sustainable.
    • For example: if your client receives overtime, but the amount and occurrence is irregular, we require two years’ of evidence (such as their two latest P60’s and their latest payslip showing the income), and 50% can be used.
    • Or: if your client receives sales commission, which is seasonally impacted and therefore isn’t regular, we require two years’ of evidence (such as their two latest P60’s and their latest payslip showing the income), and 100% can be used, where the evidence demonstrates sustainability.
  • For all applications where an applicant indicates that they have been in receipt of furloughed/ SEISS income, we will require two years’ worth of evidence, and will take the lower of the last two years (where decreasing), or an average (where increasing).

If you have any questions, please speak to your local BDM.