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Introduction

The University is committed to developing and promoting employee benefits which support staff in securing living accommodation within a reasonable commuter distance of University sites.

Purpose

The purpose of the Rental Deposit Loan Scheme (‘the Scheme’)  is to provide an interest free loan to help employees which can be used to towards funding some of the costs associated with private rental deposits and related costs, such as the first month’s rent and administration fees associated with obtaining private rental accommodation (‘the Loan’). The Loan will then be paid back by the Employee through 10 equal monthly deductions from their net pay.

Eligibility

  1. The Scheme is open to all University employees and those with a written offer of employment (‘Employees’) from the University, subject to the exceptions set out in this Policy.

  2. Employees will not be eligible for the Scheme in the following circumstances;

  • The Employee has served notice of resignation or has received notice of dismissal or is at risk of redundancy.
  • The Employee is subject to disciplinary proceedings which may result in dismissal.
  • The Employee is subject to an active final written warning.
  • The Employee has a Rental Deposit Loan outstanding.
  • The Employee has previously been declared bankrupt.
  • Where an Employee is engaged on a fixed term contract, they must have at least 10 months remaining to apply.

Conditions

  1. Eligible employees may apply to receive a Loan of up to £3,000, or one month’s net salary, whichever is the lesser amount.

  2. The University will decide at its absolute discretion whether or not to grant a Loan to an Employee and whether or not the full amount of the Loan requested will be provided.

  3. This Scheme is designed to support staff looking to live closer to Cambridge. As such, all rental accommodation should be within 20 miles of Central Cambridge. Accommodation outside of this radius will be considered on a case by case basis.

  4. University sponsored/funded staff accommodation is excluded from this Scheme.

  5. Employees are required to provide evidence of the purpose for the Loan, prior to the Loan amount being forwarded to the Employee. Failure to do so halt the application process, such as an invoice.

  6. Evidence that the Loan has been used for the purposes specified in this Policy, in the form of a receipt, must be provided to the employee’s department by the Employee within 30 days of the Loan being received by the Employee. Failure to do so will result in full repayment of Loan being required immediately.

  7. In the case of new hires:

    1. to start the application process;

      a) A written offer of employment from the University must have been accepted by the Employee in writing.

      b) All right to work checks must have been completed and passed by the Employee.

      c) All Employees must have an UK bank account.

    2. Where a Loan application is successful, the earliest the funds can be transferred to the Employee is 4 weeks prior to the commencement of employment.Where a new hire has received a loan but does not commence employment with the University, the Employee is required to repay the Loan immediately.

  8. Once the Loan is made, the University will make deductions in 10 equal monthly instalments from the Employee’s salary for the purposes of repayment of the Loan.The first deduction will be made from the Employee’s salary in the month following the month in which the Loan is made.

  9. All Loans must be repaid in full within 12 months of the Loan being paid to the Employee.

  10. Where an Employee leaves University employment before the Loan is fully repaid, the remaining Loan amount outstanding will be taken from any final payment due to the Employee. (Pay for the purpose of this Policy includes, but is not limited to salary, holiday pay, overtime, expenses, allowances and bonuses).

  11. If there is insufficient final pay to cover the outstanding Loan amount, the Employee will be required to make a separate payment to the University immediately.

  12. In the event the Employee does not repay the Loan amount in accordance with the terms of this Policy, the University will seek to recover the outstanding debt through external agencies, at the Employee’s expense.

  13. It will be a disciplinary offence to abuse or misuse this Policy.This will include, but is not limited to, providing incorrect or misleading information in the Loan application or using the Loan for purposes other than stated in this Policy.If an Employee is found to have misused or abused the Policy, any outstanding Loan amount will become repayable to the University immediately and they will be subject to disciplinary sanctions, which could include dismissal.

  14. Employees’ are encouraged to take precautions against rental fraud by referring themselves to The Action Fraud website www.actionfraud.org.uk. Full repayment of the Loan is still required, in line with the agreed repayment schedule, if an Employee was to fall victim to rental fraud.

  15. Employees should ensure that the deposit is passed over to the Tenancy Deposit Protection Scheme and they receive evidence of this.

  16. Employees can pay back the loan amount before the end of the 10 months loan period by writing a cheque for the outstanding amount, made payable to the University.

  17. Employees may apply to receive a loan up to 6 months after the payment of their rental deposit.

Process

  1. To apply for a Loan, an Employee must complete a Loan application form. The Employee must return the completed loan application form to their respective [department] to complete initial eligibility checks.

  2. The department or recruiter may take up to 5 working days to process the Loan application.

  3. The department or recruiter will review the application and complete initial checks.

  4. The department or recruiter will give a decision to Finance. The [institution] will contact the Employee and provide them with confirmation of their decision.

  5. Employees must sign the Loan Agreement and return this to [their respective department] before any Loan will be paid.

  6. The University will endeavour to make the payment of the Loan amount will ordinarily be made to the Employee within 5 working days of the decision to pay being received by Finance, however this cannot be guaranteed in all cases.

  7. The Loan will be paid into the employee’s UK bank account, as held on the CHRIS information system. Finance will not accept the provision of bank account detail through any other means and if the account detail are not in CHRIS, loan payments will not get processed.

  8. Failure of the employee or department to adhere to the process will lead to a delay in the loan application.

Tax and National Insurance contributions

  1. Employers are ordinarily permitted to loan up to £10,000 per annum to an employee without charging interest on the loan amount and without incurring tax or National Insurance deductions.

  2. It should be noted where an employee has borrowed more than £10,000 from their employer in any given tax year, the amount of loan above £10,000 will be subject to the appropriate tax and National Insurance deductions.

  3. University Employees are responsible for paying any tax and National Insurance due as a result of any loans they receive from the University exceeding this £10,000 threshold.

Review

  1. The operation of this Policy will be reviewed every six months. It may be amended or withdrawn at that time.

  2. The Policy does not form part of Employees’ contract of employment.

  3. This is a pilot scheme running for an initial six months from the 2nd October 2017.

  4. For any clarifications of the policy, please contact HR Reward.

  5. For any clarification of the payment process, please contact Finance.

  6. HR Reward will periodically review the scheme to make sure it is working as it should be.