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Any advice? Mat Pay, Childcare Vouchers, Redundancy(8 Posts)
I am being made redundant next year due to company relocation.
I am 15 weeks pregnant, and have been told that I will be offered 'everything I am owed' when I go on maternity leave, to get me off the books. Hurrah, I thought, as I had thought I would not be given company mat pay.
However, this has since raised a number of questions for me.
1. Childcare vouchers - will I still receive these? I had been banking on still doing as I thought I would just get SMP not company mat pay. However, as I will now be given company maternity pay, will the £100 childcare vouchers I salary sacrifice each month be taken out of my company mat pay (this would halve the company mat pay I will receive)
2. Should I withdraw from the childcare vouchers scheme in order to ensure I am given my full redundancy and SMP allowance? (full salary = £10000 ish, salary sacrificed = £8500 ish)
3. Will I still receive pension contributions and have NI paid? (presume not?)
4. Can I ask for the 'everything I am owed' to be calculated on when I would have left (ie March ish), as opposed to when I will leave? (ie June ish) (2.5 years vs 3+ years service)
I am just wondering if it is worth accepting the pay off early (I don't have to apparently), and my head is spinning about the childcare vouchers/sacrificed salary issue.
I will of course ask my HR dept but wondered if anyone had any knowledge of the implications of all this before I speak to them.
Thanks in advance.
Just thought I would add that in normal circumstances our company maternity pay is given once an employee has returned to work (hence being pleased and surprised that I will be given it - as I am unable to do that), as opposed to throughout the period of receiving SMP.
Will you be finishing your employment before you start maternity leave? If so, then they don't have to make any pension contributions or continue with your nursery vouchers.
If you only receive SMP, they can't deduct the nursery vouchers salary sacrifice, however in theory they can do from the comp mat pay, even if that is paid in a block when returning to work.
One thing that I will say though, in terms of bringing your pay off forward is about your personal allowance. If you accept the pay-off in this tax year, you will have already 'used up' your full personal allowance so it will all be subject to tax - if it is in the next tax year, then you will receive the full personal allowance against it too.
I don't understand why you would want everything to be calculated earlier than you are actually leaving though.
Sorry if I've completely missed the point!
Thanks for your post.
I don't know when I would be officially leave if they paid me off early (I have just asked this, as it affects quite a few things) - all I know is that they will apparently offer me 'everything I am owed' when I leave for maternity leave. But I wouldn't have to take it then if I didn't want. It's all a bit confusing tbh, and I've just asked the HR assistant to clarify a few things for me.
I don't want them to calcuate this on earlier than when I would have left at all, no, I want it to be based on when I would have left, at the end of my mat pay.
So I would be taxed on the redundancy payment, even though it is tax-free? (ie compulsory) because I would have also received my salary? Thanks for highlighting this. Unfortunately I don't know if I could get them to pay it as late as the next tax year, even if I had it paid at the end of my maternity leave, but I will certainly be checking about this.
Have just realised you probably mean all the other calculations will be subject to tax (company mat pay, SMP, holiday etc). Again, thanks for highlighting this, I hadn't considered this in my rough calculations.
You need your official leaving date as it's impossibe to work out entitlement without it.
From your leaving date you will no longer be entitled to benefits (i.e. childcare vouchers and pension contributions) so if it's early you'd be better off leaving the scheme so your redundancy pay etc is based on your full presacrifice salary.
If you stay on the scheme you will still be entitled to them, but redundancy pay and additonal maternity pay could be calulated on your reduced salary.
THe new tax year starts in April so I would imagine it will all be in next tax year if you're 15 weeks pregnant now.
Thanks for your post. I think I have it a bit more sussed in my head now. I have also sent a barrage of questions to HR. Unfortunately, I won't be able to really get all my answers til later on this year, when they send my entire office our final financial options. But I do need to know what to do about the childcare vouchers, so will press them on that.
Thanks for all the help.
What Ellypoo is saying is correct. Under a salary exchange scheme an employer may deduct from comp mat pay for as long as possible but thereafter the business meets the cost of any non-cash benefits e.g. childcare vouchers for the duration of your mat leave. It should also meet the cost of both your employee pension contributions and its employer contributions (deducting where possible) in full.
It is a common myth that employees somehow buy non-cash benefits through salary exchange. This is not correct. When you enter into salary exchange your terms and conditions change and you exchange your salary for the non-cash benefits.
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