DRO income and spending limits

There’s no limit on the income you can have with a DRO. The key figure is the amount you have left each month after you’ve covered your essential costs. Your disposable monthly income can’t be more than £75. 

You need to tell your DRO provider about income from:

• employment, including self-employment
• benefits
• pensions
• insurance
• household contributions from people you live with 

If you have more than £75 left at the end of the month, you won’t be eligible for a DRO but another solution may be suitable.

What happens if my income varies?

If your income varies from month to month, e.g. because you’re self-employed, you can provide an average of your income over at least three months or you can divide your annual net profits by 12 to get a monthly figure.

If your income goes up during your DRO, you’ll need to let the official receiver know and your DRO could be cancelled. If this happens, you’ll need to make arrangements to start repaying your debts.

What if my expenses are split with someone else?

A DRO application is based solely on your financial circumstances. But before we recommend one, we’ll need details of your household income and spending.

This is so we can make sure anyone you live with is paying their fair share of the bills. So, for example, if your partner is bringing in 70% of the household income, we’d expect them to contribute 70% towards the household bills.

What if I get benefits?

Benefits are classed as income on a DRO application, but some can be offset against care and mobility costs. 

Any benefits that you get to help with the extra costs of living with a disability can be offset, including:

• personal independence payment (PIP)
• disability living allowance (DLA)
• attendance allowance
• some benefits under industrial injuries or war pension schemes

To be eligible for a DRO, your leftover income after ‘allowable expenses’ can’t be more than £75 a month. 

Things that are necessary for your household’s basic needs are all counted as allowable expenses, including:

• rent
• travel expenses e.g. bus fare
• food, toiletries and cleaning products
• energy and water bills
• utilities e.g. broadband 

These will all be deducted from your income.

If the Insolvency Service thinks you’re spending too much on certain necessities or it believes you’re spending on items that you don’t really need, the excess amount will not be deducted from your income. If your disposable monthly income rises above £75 as a result, you won’t be eligible for a DRO.

Your DRO provider will talk to you if they think any of your allowable expenses are too high or low.

What if my expenses are more than my income?

You can still apply for a DRO if you spend more than you have coming in. This is sometimes referred to as having a negative disposable income.

Your application should still include how much you need to spend to meet your household’s needs, even if you’re not currently spending that much. For example, your food bill might be lower than it really needs to be because you’re relying on food banks.