Childcare Vouchers have been deducted from my SMP.

(81 Posts)
ChunkysMum Wed 18-Jul-12 12:56:43

DD was born in November, our benefit selections are yearly and take effect from January.

At the 'roadshow' that explains about our benefits before selection I asked about childcare vouchers and whether you could save them up and was told they'd be valid until the child's 15th birthday.

I was unsure whether I'd be eligible for childcare vouchers whilst on maternity leave but, as far as I could see when selecting my benefits, I met all of the criteria, so I selected them.

They sent me the information about my childcare vouchers so I thought I must have been eligible. I've used some of them.

I've looked at my payslips today (I know I should have done this sooner) and they're deducted the £243 every month since January from my SMP for childcare vouchers.

Should this have happened? Can they decide that I'm actually not eligible for childcare vouchers and ask for them all back if I ask for the SMP back?

What should I do?

BranchingOut Wed 18-Jul-12 13:00:35

No, as far as I am aware you should be paid childcare vouchers on top of your SMP.

They have got it wrong.

I haven't got time to search, but I think some info might be found here:

or try Directgov.

spammertime Wed 18-Jul-12 13:02:52

No they cannot deduct from smp

BUT they can deduct from any excess maternity pay they give you. So the bare minimum they can pay you is the smp (about £130 per week).

They also have to keep providing your benefits while you're on mat leave. So if you are on basic smp then they should be paying you that AND the childcare vouchers.

spammertime Wed 18-Jul-12 13:04:27

Also beware complicated payslips! My payslip on mat leave looks like they are deducting from smp. However they then "top it up" to get me back to smp.

How much are you getting in your bank account each month?

ChunkysMum Wed 18-Jul-12 13:10:27

I'm getting £297.56 per month into my bank account. Stupid question but have they deducted it? I'm only entitiled to SMP but aren't 100% how much that should be after tax etc.

nextphase Wed 18-Jul-12 13:14:10

Do you already have an older child who you were claiming vouchers for while you were pregnant?
If not, I'm guessing that the vouchers weren't part of your package during the qualifing period, and so possibly the rules are different.

I was entitled to SMP and vouchers during my maternity, but was claiming them before i fell pregnant for DS1.

spammertime Wed 18-Jul-12 13:17:43

Can you find your tax code on there? It will be something like 815L. Also how much are you getting by way of vouchers?

spammertime Wed 18-Jul-12 13:18:24

But it's looking incorrect at the moment from what you've said

ChunkysMum Wed 18-Jul-12 13:31:00

Nope, not an older child. DD is my only child, that's why I was unsure whether or not a qualified for the vouchers in the first place. The benefits thing just says 'if you have a child' it also says:

'Where employees join the Childcare Voucher scheme on or after 6 April 2011, the company will carry out a Basic Earnings Assessment (BEA), to decide what level of exemption they will be entitled to. The BEA is calculated by adding together your basic earnings and any applicable allowances plus any taxable benefits that you receive from the Company. Subsequently, the BEA will be carried out annually at the start of each tax year. The assessment then remains valid for the whole of the tax year.

Not sure what that means? confused

My tax code is 810L.

ChunkysMum Wed 18-Jul-12 13:34:48

I've also found this in the terms for the vouchers:

Can all staff benefit from the scheme?
Although you must be made aware of the scheme and be able to apply, you may not be eligible to participate if you:

Do not have children in qualifying childcare (you may choose to use informal care such as a friend or member of the family)
Do not earn sufficient salary (a salary sacrifice cannot reduce your cash pay below the National Minimum Wage)
Already benefit from working tax credit.

ChunkysMum Wed 18-Jul-12 13:35:35

At the time I selected my benefits my salary was still normal as the employer topped it up. I dropped to just SMP in mid January.

ChunkysMum Wed 18-Jul-12 13:36:25

I'm worried that if I try to get the SMP paid back they'll say "Well actually you weren't entitiled to the vouchers in the first place so we want them all back."

ChunkysMum Wed 18-Jul-12 13:36:52

Also, what are they going to do next month when SMP stops?

CinnabarRed Wed 18-Jul-12 13:42:35

I'm afraid your employers are correct.

You've selected a benefit - in this case CCVs, which also happen to be tax efficient if you're a taxpayer on a cumulative basis - for which you pay via a deduction in your gross salary.

The tax benefit comes from the fact that they deduct £243 from your gross salary (which for a basic rate taxpayer should be very roughly equivalent to £175 of net salary), and in return get CCVs that you can exchange for £243 of childcare that you would otherwise have to pay for from your net salary.

You will have a CCV account with one of the providers which is racking up each month and which you can use on childcare at any point before your child turns 15.

I do agree that there's no tax benefit if you're not a tax payer. Although if you're only not a taxpayer while you're on maternity leave then the position will correct itself over the course of the tax year when you return to work and start to pay tax again.

I'm a tax adviser, so I'm comfortable that the above stuff is correct. What I'm not sure about is whether there's some separate employment law that prevents deductions of any kind (perhaps over a certain value) from SMP.

PM me if you want more information on your tax position.

ChunkysMum Wed 18-Jul-12 13:52:35

Thanks cinnabarred, sorry that I seem to be a bit slow and confused about all of this.

Does that mean that I was not entitiled to start the childcare voucher scheme when I did my benefits selection in December. Will they ask for them all back?

ChunkysMum Wed 18-Jul-12 13:58:24

OK, HR say that I need to contact pay and benefits, with them cc'd in.

I'm really worried they're going to ask for the vouchers back.

spammertime Wed 18-Jul-12 14:02:14

Cinnabar there absolutely is legislation that they can't deduct below smp. However I also thought you couldn't join a childcare voucher scheme until you had children.

CinnabarRed Wed 18-Jul-12 14:04:18

At a very basic level, all you need to do to qualify for CCVs is have a child!

That said, the way the tax law that governs CCVs works means that there's no benefit to you if you're not usually a taxpayer (i.e. because your salary is below the annual personal allowance of £8,105). That's what the BEA bit is about. It's saying that your company is obliged to make sure that, all things being equal like that you're planning to return to your job after maternity leave, you will pay enough tax to benefit from receiving CCVs.

CCVs are a type of tax arrangement called a salary sacrifice. As I described above, you sacrifice £243 from your gross salary and in return get benefits worth £243 of net salary. As it's illegal to pay someone less than the National Minimum Wage, you can't participate in a salary sacrifice scheme if the sacrifice would take you below the NMW. That's what the your staff handbook meant when it said you have to earn about the NMW to qualify. I'm not 100% sure, but I don't think that SMP is governed by the NMW legislation because you're not working at all while on SMP.

The tax law specifies what qualifying childcare means. Basically it's formal childcare - a nursery, registered nanny or registered CM. They don't want people to select CCVs as a benefit, and then pay them to granny when granny would have looked after the kids for free anyway. And, less cynically, it's to ensure that the children benefit from a reasonable standard of childcare.

What happens next month, I'm not sure. Perhaps give your HR team a call to ask?

spammertime Wed 18-Jul-12 14:05:59

Also when writing suitable salary sacrifice agreements it's very important to make clear the employee is agreeing to take a lower salary plus whatever benefit. An employer has to keep providing benefits throughout mat leave and can't deduct below smp. I assume this is why most companies wouldn't allow changes whilst an individual is on mat leave.

CinnabarRed Wed 18-Jul-12 14:06:24

I think spammertime is right - I think you do actually have to have delivered your child before you can join a CCV scheme. Let me check - I'll come back to you.

If the error is their's - in that they shouldn't have enrolled you into the scheme until you had your DD - then I think there's a good chance they'll see you right.

spammertime Wed 18-Jul-12 14:07:34

But if she signed up before having a child, then there'd be an argument the whole thing wasn't valid from the outset!

spammertime Wed 18-Jul-12 14:08:17

Sorry am majorly cross posting - we seem to be in agreement cinnabar

spammertime Wed 18-Jul-12 14:21:37

You def need to have a child before joining. I had several clients desperate to join before the rules on higher rate tax relief changed, but couldn't as their babies weren't born!

ChunkysMum Wed 18-Jul-12 14:24:12

I had my child when I signed up.

I had her in November and had to select my benefits in December when she was a few weeks old. I was still receiving full pay at that point due to my employers mat package but this dropped to SMP in mid January.

The vouchers have continued to be deducted from SMP.

Fuchzia Wed 18-Jul-12 14:25:50

Interesting. I'm on a years Mat leave with second child. Full pay for 6 months SMP for 3 and then nowt for three. Was told that cc vouchers for my oldest would be paid out of my SMP and they would pay the CCVs for me for the final three months. not cOm

Fuchzia Wed 18-Jul-12 14:27:39

Should add that I'm hapPy with this arrangement but wondering if they've got it right!

spammertime Wed 18-Jul-12 14:31:44

Just to confirm, employers cannot deduct from smp

Here is a (very long, very dull) document from HMRC confirming that point:

See page 5 in particular

Lougle Wed 18-Jul-12 14:35:06

Ok, you met the requirements ("have child") before you started the vouchers.

Your employers are wrong.

-You should not have any deductions from SMP, by law.
-You should continue to get contractual benefits during Maternity Leave, by law.

You can look the information up on the HMRC website, or you can call ACAS..but what you need to do overall is contact your payroll department and alert them to their error.

ChunkysMum Wed 18-Jul-12 14:40:48

Right, I've emailed payroll.

Fingers crossed that they decide to pay me all of the SMP.

Lougle Wed 18-Jul-12 14:45:18

No fingers crossed about it! They have to.

mamababa Wed 18-Jul-12 14:48:07

I was told that I had to be paid mine and they are a non-cash benefit and cannot be deducted from SMP. The HMRC website confirms this smile

CinnabarRed Wed 18-Jul-12 17:16:39

The one other thing to check is that they have actually (incorrectly) taken the deduction from SMP. If you have other cash payments to you then the CCV deduction could be taken out of those.

Some employers pay more than the statutory amount of SMP (IFKWIM), but show the element that's SMP as a separate line on the payslip.

ChunkysMum Thu 19-Jul-12 14:25:09

They have got back to me.

They're going to check the law on deducting from SMP but say that, even if they don't deduct from smp, they will not make up the difference.

Apparently it becomes sort of a rolling debt that they'll take off my wages when I return or I'll owe them it if I don't return. Is this right?

RedKites Thu 19-Jul-12 14:44:26

The 'occasional misunderstanding' at the top of page 22 in the hmrc doc spammertime linked to implies they are not allowed to hold the debt against you. Could you send them a link to that document? The only grey area I can (in my very amateur opinion) see is that this wasn't actually a benefit you were receiving when you went on maternity leave - but then they let you select the benefit, so I would have thought they are bound by that?

CinnabarRed Thu 19-Jul-12 15:25:02

But she was receiving the benefit while on maternity leave - the CCVs were (are) racking up in her CCV account, ready to use as and when she wants to spend them on qualifying childcare.

I think it's their problem not yours, but I'd defer to spammertime for better information. It might depend what was in the employee communication for your particular scheme. (And even if it is their problem, there's a separate question about how much you want to rock the boat.)

Lougle Tue 24-Jul-12 06:39:12

They will make up the difference because that's the law! If they regard it as a rolling debt, then they are simply deferring the deduction from your SMP!!

TheDoctrineOfSnatch Wed 25-Jul-12 08:01:55

I agree with Lougle. A lot of employers seem confused about this, though.

If the benefit you'd chosen in December was gym membership, they wouldn't have been able to charge you the monthly fee for that out of SMP either.

GoingforGoingforGOLD Wed 25-Jul-12 08:16:40

Lurking as I'm in a similar predicament with my employer

We've reached stalemate with them insistent that I'll have to repay the ccv I've received whilst on smp once I get back to work

Interestingly they've just changed provider (of the scheme) and the new agreement includes a clause that provision of ccv will stop when an employee is on smp or sick pay or any other time earnings drop below the min wage

The agreement I'd initially signed didn't include this clause. They grudgingly paid ccv whilst I was on smp, after I bombarded them with evidence that it was their duty to. Now they say the benefit they provide is the opportunity to purchase vouchers. Not the vouchers themselves

TheDoctrineOfSnatch Wed 25-Jul-12 08:39:04

Gold, do you mind saying which provider it is (the new one)?

I am surprised at that.

GoingforGoingforGOLD Wed 25-Jul-12 09:17:32


And I'm put out about it because the choice is agree or no longer get vouchers.

I'll not ever be on smp again but I think it's crap for my colleagues, especially anyone on sick pay and I feel responsible.

GoingforGoingforGOLD Wed 25-Jul-12 09:24:01

I think it'll become more common, having to agree to opt out of the scheme to avoid employers having to cover the cost as it becomes more well known that employers should be paying ccv to people on smp

It's a loophole really isn't it? One bit of legislation about the provision of non cash benefits and another about deduction from statutory payments. The ccv whilst on smp is a grey bit where these two cross.
It seems too good to be true and I wouldn't be surprised if this way
of closing the loophole becomes the norm

spammertime Wed 25-Jul-12 13:02:25


They absolutely cannot do that as it goes against the whole principle of salary sacrifice. You are absolutely NOT paying for vouchers, and they are in danger of scuppering their salary sacrifice agreement (and therefore having to pay back a potentially large amount of employer's NIC.

Your agreement says you are going to receive a lower "base salary" and a sum of childcare vouchers rather than a higher base salary.

Yes they may effectively lose out when some employees go on mat leave (and someone with knowledge could abuse the system if they know the rules). But do remember they aren't just offering such schemes out of the goodness of their hearts. They are making savings too.

flowery Wed 25-Jul-12 13:30:56

GoingforGold it's not as easy as that - an employer can't contract out of their legal obligations regardless of what a third party provider says. If it were possible to put terms in an employment contract saying this or that legal obligation doesn't apply to us, it would happen a lot!

GoingforGoingforGOLD Thu 26-Jul-12 10:44:16

I am v pissed off about it because it seemed that we are being asked to opt out of something that is our right

I'd love to fight it, but I've gone as far as I can. I've presented them with all the legislation. I've spoken to ACAS, short of taking them to court I don't think there's anything else I can do.

GoingforGoingforGOLD Thu 26-Jul-12 10:47:37

And on a bit of a tangent (sorry op I'm hijacking a bit) so whilst I've been on smp has my employer been paying NIC for me?

And therefore if I did have to repay the ccv would those NIC be affected?

prh47bridge Thu 26-Jul-12 11:49:26

Yes, SMP is subject to tax and NI. However, after the first 6 weeks you are only entitled to £135.45 per week which is below the NI threshold.

SMP for the first 6 weeks is 90% of earnings. As you have given up some of your salary to get CCVs, the amount you got for those 6 weeks should have been reduced a little. For example, if you earned £350 per week but gave up £50 per week to get CCVs, your SMP for the first 6 weeks should have been 90% of £300, i.e. £270 per week. If your SMP for those weeks was more than the relevant thresholds you should have paid tax and NI on that.

However, that isn't what spammertime is referring to. You have sacrificed part of your salary for CCVs. As a result the amount of tax and NI paid by both yourself and your employer are reduced. Overall you and your employer benefit because there is no tax or NI on the CCVs (assuming the value of the CCVs is below the exemption limit). However, this only works if you have genuinely sacrificed your salary.

If your employer insists on reclaiming the CCVs from you HMRC will say that this is not a salary sacrifice scheme and that you are in fact paying for the CCVs from your salary. They will certainly say that if they hear what your employer is saying (probably without understanding the consequences) when they say the benefit is the opportunity to buy CCVs, not the CCVs themselves. If the benefit is just the opportunity to buy CCVs it is completely worthless. Sticking to the figures I gave above, you would be taxed and pay NICs on £350 per week, your employer would have to pay NICs on £350 per week and your SMP for the first 6 weeks would be £315 per week. You would be paying £50 from your taxed pay to get £50-worth of vouchers. Pointless.

Refer your employer to this guidance document from HMRC. Refer them particularly to page 11 where it says, "the employer cannot compel the employee to opt out of receiving the benefit." Refer them also to section 2, particularly the top of page 13.

If they refuse to budge you don't have to take them to court. Refer the matter to the Disputes Team at HMRC. You have 6 months to register the dispute from the date when your employer said you have to repay the CCV. Ring 0845 302 1479.

Ellypoo Thu 26-Jul-12 11:55:09

Just one note re prh47bridge's post above:

The first 6 weeks of ML is paid at 90% of normal salary - this is actually part of SMP and so therefore the CCV cannot be deducted from it, just as it cannot be deducted from the government set rate.

prh47bridge Thu 26-Jul-12 12:57:26

Yes, so in my example you get £270 per week PLUS £50 worth of CCVs.

The whole point is that your salary has been reduced from (in my example) £350 per week to £300 per week. Your rights to return to £350 per week are limited - if you can change back at any time it is not a salary sacrifice and you will be taxed on the full £350 per week. Once you have sacrificed some of your salary, your benefits, tax, NI, pension, etc. are calculated on the reduced salary (£300 per week in my example). You also have a non-cash benefit (the CCVs) which the employer must continue to provide whilst you are on SMP. This is all set out in the document to which I linked.

This also has a section on common mistakes, one of which is to calculate SMP as if there had been no salary sacrifice (using my example again, as if the employee was still earning £350 per week).

GoingforGoingforGOLD Thu 26-Jul-12 13:36:33

This is great info. Thank you

I'm going to have to reignite our 'debate'

I'd kind of run out of steam to fight it but it's left a very sour taste. I only claim £120 a month so it's a pretty small sum in the big scheme of things

ChunkysMum Tue 31-Jul-12 15:36:04

Last week they got back to me to explain that the CCVs were deducted from my SMP due to an administration error so I can chose to be reimbursed the money and then have to pay it back out of my wages when I return to work, or we can just leave it as it is.

They also stated that I can chose to opt out of the CCV scheme when my SMP runs out, to avoid a large bill when I get back.

I emailed back quoting the big HMRC document and giving them the link to it (again).

They emailed me today to say they're looking into it further and should get back to me by the end of the week - is this good news?

TheDoctrineOfEnnis Tue 31-Jul-12 15:45:29

At least they are checking it out!

elportodelgato Tue 31-Jul-12 16:02:00

Chunky, they have still got it wrong and you need to persist with this. You are eligible to claim CCV once your child is born and they are NOT allowed to deduct it from your SMP. They can deduct it if you have a more generous maternity package than is statutory (eg: one of my friends is on 50% of her salary for 6 months and so the CCV are deducted from this)

But they are not allowed to tell you to keep the CCV now and then deduct it from your wages once you return to work. That's a load of rubbish! I claimed CCV all through my second maternity leave and then didn't return to work at the same place and I didn't owe them anything. There was a court case where it was established that CCV are a 'benefit' rather than 'remuneration' and that therefore the employer has to keep providing them even when the employee is not technically earning a wage (although still employed).

Read this article here which explains it quite simply :

Good luck with your HR department

spammertime Tue 31-Jul-12 16:08:40

Chunky is your employer a large one? They really should be getting things right from what you've said, ie they had a roadshow re benefits selection. I know you feel like you're doing this for your own benefit, but they need to be getting it right for their own protection (HMRC would be looking at salary sacrifice schemes in the event of an audit) so think of it as doing things for the greater good!

ChunkysMum Wed 01-Aug-12 19:36:09

Employer is a large and global.

They have come back to me with info from the mat leave and benefits policies saying the below:

From the maternity leave policy:

It is extremely important that prior to commencing SML the employee must go into the benefits site to review their current benefit provision, they should read the detail available with regard to any restrictions that may apply and notify the Human Resources Department within 28 days of their leave date on how they wish XXXXXX to process their benefits for the SML period.

Employees should be aware that their benefits elections (with
the exception of your pension ? please see below) will continue as normal during SML. If the employee does not receive sufficient pay to cover the cost of their elections they will be required to repay the outstanding balance in their first month on their return to work.

In the event that the employee does not return from SML they will be required to reimburse the outstanding in advance of their official termination date.

From the benefits policy:

Your benefit Options will continue if you are absent from work and in receipt of statutory sick pay, statutory maternity pay, statutory adoption pay, statutory paternity pay or nil pay . On your return to work and paid employment you will reimburse the Company with the cost of any benefits paid in excess of your Options, this includes any pension contributions which have continued to be paid. If you do not wish to continue with your Options you may be able to opt out if there is a Qualifying Lifestyle Event.

From email from HR:

For the avoidance of doubt, the company is not ceasing to provide CCVs during your statutory maternity leave. However, XXXXX is seeking for reimbursement of the cost of the CCVs in line with the documents referred to above.

Is that it then? I will be given the money back and then have to repay when I get back?

flowery Wed 01-Aug-12 20:27:33

No that's not it. Of course the childcare voucher company shouldn't be expected to fund your vouchers, but they should and will seek reimbursement from your employer, not directly from you. Presumably they get paid by your employer already anyway, so the only thing that changes is your employer won't be able to deduct the amount from you, and will have to cover it themselves. They can't hide behind/blame the voucher company.

ChunkysMum Wed 01-Aug-12 20:35:37

What can I say to them Flowery? No idea how to write this email!

flowery Wed 01-Aug-12 21:57:54

I'd just thank them for confirming that they will continue to provide the vouchers, then say

As I'm sure you are aware, a salary sacrifice scheme is an agreement to permanently vary the amount of salary I receive, and constitutes a legally binding change to terms and conditions. The salary sacrifice I entered into involved my agreement to reduce my salary to £x. Any attempt by [employer name] to reduce my salary further on my return from maternity leave without consent to compensate for having had to provide vouchers during my maternity leave will be a breach of contract and/or unlawful deduction/s from salary. As the reduction in salary/deductions would be a direct consequence of my maternity leave, such actions would also constitute unlawful discrimination under the Equality Act 2010.

I am hereby placing [employer name] on notice that a grievance will duly be raised should any attempt be made to reduce/deduct from my salary without my consent for discriminatory reasons.


Don't put bosh. grin

HMTheQueen Wed 01-Aug-12 22:17:53

I've really got nothing to add to this thread as Flowery has said it all - but can I just say this:

Flowery - you are always here helping people and giving really good, sound, and helpful HR advice. I'm sure you've helped to stop many potential issues in their tracks before unknowing employers make huge errors. You are one of those MN heroes. I salute you.

TheDoctrineOfEnnis Wed 01-Aug-12 23:13:33

I second HMtheQueen. Well done Flowery.L

flowery Wed 01-Aug-12 23:19:37



ChunkysMum Mon 06-Aug-12 12:11:42

Sent it.

Thank you Flowery. I also discussed this with an employment lawyer who advised me to cc her in the email.

Will let you know how it goes.

baffledmum Mon 06-Aug-12 20:43:24

can I add that you need to be aware that if you do KIT days and are paid for those, then your employer can deduct the money for the CCV from that salary.

As Flowery says though, it cannot deduct from your SMP.

jennielou Sun 12-Aug-12 22:02:46

HI All, Ive only just signed up tonight to Mumsnet to post a very similar message. I've read this thread with great interest from the beginning, then found it stops here - what a cliff hanger ;) Is there any news?

I'm pregnant with my second child (21 weeks) and currently dad makes the salary sacrifice for the CCV as we were advised (12+months ago) that if No.2 came along this would come out of my SMP.

My maternity package is as basic as it comes so when a friend of mine told me to look into this this, i thought I'd join up and see if anyone else was in the same position.

If i need to get the salary sacrifice setup from my account to get the benefit then i'd guess id need to do it sooner rather than later? Can anyone advise on this as we really could do with Daddy's full wage.

Any help would be really appreciated.

ssmile Sun 19-Aug-12 16:42:36

Can I just add that I had to USE my vouchers in the month they were paid into my salary or be kicked out of the scheme. I work for a government agency so they are very tight on the scheme and as I wanted to stay in the scheme they paid me my vouchers while on SMP and NIL pay but I had to set up a standing order with the nursery to pay them straight out again against an invoice for fees in advance for the babies nursery place. Luckly this is my second baby so I know the nursery well and they were happy for me to do this.

flowery Sun 19-Aug-12 16:46:48

Jennielou what help/advice do you actually need- sorry I'm not 100% clear what your question is.

On a separate note, you do realise both parents can take childcare vouchers at the same time, it doesn't have to be one or the other.

TheDoctrineOfEnnis Sun 19-Aug-12 17:25:18

ssmile I don't understand that as there is nothing on the rules
Preventing vouchers being saved up. Is your employer in a voucher scheme or do they make direct payments!

ssmile Sun 19-Aug-12 20:28:07

Voucher scheme was accor I cant remember who they changed to off the top of my head when accor got bought out ot just name changed? But those are the rules of our scheme. I didn't understand it fully when I went on Mat Leave 12mths ago so wasnt crafty enough to up my vouchers to the full £243 which was a shame (I did re-read the blooming policy three times before going off but it was deliberatley obscure I think!) I go back to work next week :-( cant believe a year has whizzed by. But I did get the nursery to bill ahead and I know of at least two other women where I work who have done the same to ensure they stay in the scheme whilst on mat leave. This is especially important if you tip the higher tax bracket and were in the scheme with another child pre the tax rule changes.

ssmile Sun 19-Aug-12 20:31:04

Yes you can accrue the vouchers but during the period when you are on SMP or NIL pay its your employer paying the vouchers not you, hence you need to spend those vouchers not the ones you have paid for. My DH has been accuring his vouchers the entire time Ive been on leave.

TheDoctrineOfEnnis Sun 19-Aug-12 22:41:35

Hmm, I didn't know that. Thanks.

Spammertime Mon 20-Aug-12 19:15:34

Ssmile it's always your employer buying the vouchers - that's the whole principle of salary sacrifice. It sounds like your employer had imposed some (unnecessary) extra condition (which is of course their prerogative) - however there is nothing tax wise that means they HAVE to do this. I work for a professional service company who advise on this type of scheme, have just been on 12m mat leave, and did not have to spend what I earned in vouchers each month.

ChunkysMum Tue 21-Aug-12 14:49:29

Ok, go a reply today:

Having reviewed the matter with our legal advisers, the Company’s position remains the same. We believe the process previously outlined regarding reimbursement of benefits during maternity is fair, lawful and non-discriminatory as it applies consistently to all employees during a period of statutory leave or on nil pay.

When you signed up to the benefits scheme you declared that you had read and understood the benefits scheme Terms and Conditions which includes the clause on repayment of benefits in excess of your allowance. In addition, the letter which was issued to you prior to going onto maternity leave, clearly indicated the method by which the Company operates benefits during maternity and the options available to you, including opting out of benefits so that you didn’t incur a negative balance upon return to pay.

On this basis the Company has a contractual right to deduct the balance owed upon your return to paid work / or from your final pay.

Please note, as part of registering the benefits scheme as a compliant salary sacrifice scheme with the HMRC, we provided a copy of the benefits scheme terms and conditions with the application. The HMRC has provided its approval that the benefits scheme salary sacrifice scheme is effective for tax and national insurance purposes and therefore we are comfortable that the reimbursement method we have chosen is lawful.

I realise that this may not be the response you were hoping for and again would like to remind you that if you wish to opt-out of childcare vouchers, you may do so this month, under the QLE – going onto nil pay. Please confirm by email if you wish to opt out by 28th August and I will make the necessary changes in the system on your behalf. The opt-out would be processed in August so that no further contributions will be sent to the CCV company^ from September, i.e. the last contribution would be provided for August payroll.

I am pleased to confirm that the refund of childcare vouchers which were inadvertently deducted from your SMP has been processed in your August payroll. Again, I would like to offer my sincere apologies for this admin oversight.

I will leave you to seek legal representation as you see fit.

What on earth do I do now? (Thanks for the help so far everyone)

prh47bridge Tue 21-Aug-12 18:22:47

So they think a scheme which clearly contravenes the HMRC guidance to which I linked is ok? I suggest you ask HMRC yourself.

ChunkysMum Wed 22-Aug-12 19:59:46

Apparently so. HMRC just kept directing me from department to department confused

Is it worth raising a grievance? What's the process? Will it cost me?

flowery Thu 23-Aug-12 18:20:07

The fact that the scheme is effective for tax purposes doesn't mean it meets employment law requirements.

I would just thank them for their reply, and reiterate that if they attempt to reduce your salary on your return from maternity leave you will be raising a grievance for unlawful deduction from salary/breach of contract and maternity-related discrimination.

ChunkysMum Thu 23-Aug-12 21:17:50

Thank you Flowery.

I am due back on 31st October. We'll see what happens.

MrAnchovy Sat 25-Aug-12 18:39:39

Only just picked up on this - I don't usually watch this topic as there are some really knowledgable people here who cover all the angles.

From your employers letter it looks like they are prepared to stick their neck out on the basis of a fairly shaky legal view - and why not, they have nothing to lose but the goodwill of their employees.

If you are willing to stick your neck out you can raise a grievance over this and appeal the result (which will surely be unsatisfactory) at an Employment Tribunal. You must take advice from your trade union or ACAS and have top draw legal representation to succeed in this, but succeed you surely will as their assertion that a policy that impacts on men during their 2 weeks of paternity leave 'equally' as it does on women during their 12 months of maternity leave is not discriminatory on grounds of sex is clearly incorrect.

MrAnchovy Sat 25-Aug-12 18:43:03

Oops, should have mentioned that the reason I am posting this is that you need to get your side lined up now because things will need to happen very quickly once you return to work because you will need to raise the grievance immediately they make the deduction of wages. Actually as they have notified you of their intention to deduct you possibly need to act now.

ChunkysMum Mon 05-Nov-12 15:00:21

I have now finished work, got my last payslip on 31st October and they have deducted the cost of childcare vouchers from my final payslip. (Didn't act earlier as I have been in hospital with meningitis)

I'm panicking now. I cannot afford a lawyer. I am now a full time student, DH earns £16,000 PA so I don't think we'll qualify for any kind of legal help. I don't have legal help in my home insurance.

How do I raise a grievance?

ChunkysMum Tue 06-Nov-12 19:18:05

I've called work and asked them to email the grievance policies to me.

They have sent a letter saying they will waive the cost of my CCVs that was above my final holiday pay as a good will gesture.

If anyone has any advice on raising a grievance and going through with this, I would very much appreciate it.

Lougle Tue 06-Nov-12 19:46:16

I imagine that this is something that would be dealt with by a tribunal, and that is free of charge.

So, with that in mind, you don't need to be worried about the grievance process, just follow it through.

ChunkysMum Tue 06-Nov-12 19:55:34

Thank you Lougle. Doe you know if there's a time limit on raising a grievance? I called HR yesterday and today for them to email me the required documents and I've not yet received them.

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