Childcare voucher / maternity leave query

[orangeone]

Help! Need to know what I can do about childcare voucher issue at work.

In brief, I work in the NHS and had full £243 childcare vouchers for my older child as part of a salary sacrifice scheme before I went on Maternity Leave.

I was advised to drop this to £1 contribution before the 17th week of the pregnancy to ensure that I got the maximum maternity leave pay (as salary would be full rate for calculation of maternity pay).

I did this and have been paying only £1 of salary into vouchers. At the time I was also advised I could change back to £243 after 12 months. 12 months is up shortly and I want to increase voucher allowance back upto £243. However this will start whilst I am still on SMP (last 3 months of maternity leave). Consequently work will be liable to pay the childcare vouchers as you can't deduct from SMP.

Spoke to work HR and they have told me that even though I could in theory increase my vouchers to £243 they won't let me whilst I am on maternity leave because they are liable and stated I am 'milking the system'. They said they would honour the £1 I had been making till I return to work and they would have honoured £243, had I been claiming this to date but as I haven't they won't change my contributions now.

Can they do this? Surely that's a benefit I am entitled to? And it's up to me how much of my £243 tax free allowance I want to use? I am not trying to 'milk any system' but just want what I am entitled to especially after many years of loyal service and overtime!! Can someone help as need advice about how to take this forward urgently.... Thank you in advance.

[MrsSpencerReid]

I think the advice to drop your contribution during leave was possibly not the best I get full allowance at the mo and after speaking to hr I am leaving it at the max through out my time off, when I 'earn' enough yes it will be deducted but when my pay drops to smp/unpaid work will continue to pay the vouchers at the rate I was paying, which if I read correctly, is what you've been told. That's not what you wanted to hear, sorry, hope someone will come and tell me I've got it wrong!

[mikkii]

SMP is calculated at 90% of average pay for a period preceding maternity leave for the first 6 weeks (or more depending on your contract). It s quite normal for staff to be recommended to reduce salary sacrifice vouchers to maximise maternity pay.

If it is a salary sacrifice, then you need adequate salary to sacrifice for the vouchers. This seems perfectly reasonable to me.

[MrsSpencerReid]

I guess it's a trade off between increased mat pay or more child care vouchers

[IrisWildthyme]

The advice to drop to £1 was wrong - it is only appropriate to do if you are going back to work at the end of the %-of-pay bit of maternity leave - in which case it is good to drop your voucher contributions if you can afford to as this will mean the % is the maximum it can be. However, if you are taking more than a small number of weeks of the SMP-rate of maternity leave, any gain from the effect on % is quickly cancelled out as they have to keep up the £243/m voucher contribution if it has been continuing up to that point, and cannot deduct it from SMP.

Unless your HR made an actual mistake here I think it's too late to do anything about it. A lot of employers word their Maternity Benefits very carefully e.g. "You may wish to consider dropping your childcare voucher contributions to a minimum in order to maximise the amount you get" - but carefully DO NOT actually advise you to do this and obviously don't bother pointing out that it's not a sensible thing for anyone to do if they are taking a full year of leave - it is in their interests for you to think they are telling you that it's the best thing to do without doing the maths yourself.

[orangeone]

But can work stop me increasing my vouchers back to £243 to stop themselves being liable? If I have correspondence from then saying I can change the value back up after 12 months then surely I can even if it means they are liable? Or is the £243 not a figure set by Th e tax office and something your employer can decide how much of childcare vouchers you can have?

[MrsSpencerReid]

Could it be that you can only increase it once you're earning enough for them to deduct it from your salary? So whilst you're on smp, you have no salary so can't increase it?

[orangeone]

That could be the case? Although the hmrc notes:

www.hmrc.gov.uk/employers/sml-salary-sacrifice.pdf

Employers must continue during AML (as well as OML) to provide any non-cash benefits that they have agreed to provide as a term of the employment contract.
? These non-cash benefits are what she is entitled to under her contract of employment ... These non-cash entitlements would include:
o non-cash vouchers, such as childcare vouchers which can only be used by the employee for qualifying childcare and are not transferable.

As childcare vouchers (up to the value of £243) are part of my employment contract they have to pay them?

Not sure how to play this if at all....

[orangeone]

But HR told me I could increase after 12 m

[orangeone]

But HR told me I could only increase after 12 months, not that I couldn't increase if they didn't want me to or had only SMP. That was never mentioned....

[orangeone]

Sorry - double posted there!

[MissMalonex2]

I think the issue is that your non cash benefit (childcare voucher) that is agreed under contract is currently £1 - so they are honouring that, but not allowing you to vary your contract to £243 of vouchers.

[Thesunrising]

Talk to these people for advice.

www.maternityaction.org.uk/adviceline.html

I am finding myself in a similar situation. Employer has verbally told me they won't honour payment of vouchers during my mat leave, but took two months of chasing to get even this from them. In the meantime I cancelled my voucher deductions from my salary for last 8 weeks of paid work to maximise my SMP. I am pressing my employer to confirm in writing that they will not continue this payment during mat leave - ha!

Advisor at Mat Action told me its not uncommon for employers to try and wiggle out of this obligation. It's very frustrating when u realise your employer is not being fair or abiding by the legislation.

[IrisWildthyme]

I don't think it's wise to attempt to force them to honour the statement that you could increase after 12 months. Their obligation is to keep in place all the benefits you had during the period before you went on leave. They hoodwinked you into minimising this - it was mean of them but fighting it won't get anywhere. You wouldn't be allowed to change it back until you are earning again and the deduction made from your salary.

[baffledmum]

Are you currently in the election window for your flex scheme? If you come back to me reasonably quickly I can help you with this.

[baffledmum]

To be clear to everyone, anyone on mat leave CAN amend their voucher order while on mat leave during the annual flex window. I know what the HR team mean by "milking the system" but they cannot prevent you from doing it during a flex review window. To do so is discrimination. While you do not have sufficient salary to deduct from the business has to meet the full cost.

This actually applies to all benefits received using salary exchange inc full pension contributions, where your contributions are made using the salary exchange mechanism.

[orangeone]

Hi and thanks for all your messages.

I can amend my voucher amount every 12 months, which is in December (although have to do paperwork month before). Have email from worn saying can amend in December although amendment form states any amendments are at employers discretion. Is that true?

Was thinking of sending amendment form in to work and then waiting for their reason they will refuse in writing. So far their reason is because I am 'milking the system'. Not sure what legal grounds this falls under .

[IrisWildthyme]

Ah I wasn't aware that some schemes only let you make changes once a year - ours allows a change any time we like. Sorry. That changes my view somewhat. When does your Mat Leave end? If failing to change the amount now would mean you have to return to work with no vouchers to help with childcare it would be thoroughly unreasonable of them not to let you change back - you are not "milking the system" to do this any more than taking up any of your other employment rights! If they have an issue with it then their issue is with a system that only allows you to change once a year - I would emphasise that you would be perfectly willing to upgrade the amount in [March]* if that was allowed but given that it is now or never you are not prepared to wait till the next amendment window to begin receiving vouchers again, especially given that you were assured last year that this would be fine.

• insert your actual month of return here.

[baffledmum]

You make your request to your employer and there are grounds on which a flex application could be turned down using their discretion. Unfortunately for your employer the only reason they will be turning you down is because you are on mat leave which means they are discriminating against you as a woman. That is illegal. I suspect your HR department, once you spell that out to them, will back off (although I think they already know this is the case). We have just gone through an annual flex window and have had to accept people on mat leave doing this very thing. Be aware though, if you do KIT days they can deduct the cost of your CCVs from that.

You will also be able to adjust your CCVs again on your return to work, I suspect. Returning from a period of mat leave is usually a separate lifestyle event in itself - it definitely is different to your annual flex window unless the 2 things fall in the same month.

[baffledmum]

P.S. Once dads can take the same mat leave as mums I think employers will be able to refuse these requests by applying the law equally to men and women on leave, but we aren't quite there yet. One to watch out for though.

[orangeone]

Thank you so much for taking the time to reply.

One thing I am not sure of is the nature of my CCV scheme (I.e. whether it is a 'flex' scheme as I don't know what this is TBH).. All I know is that I have the option to change my vouchers every 12 months and not before, and that I have it in writing that I can do this in December 2013. By changing them then, work would be liable to pay them for my last 3 months of SMP. They are refusing to increase them until after I return to work in February 2014 and they are not liable anymore. Thinking maybe I put a request in and she their legal reason to refuse my request??

I am a bit upset by their view of me as milking the system as I have just followed their advice to reduce and then increase on the date they told me I could. Everything seems to be at their 'discretion' so I feel like they will do what's advantagous for them rather than what I can do legally or have a right to do.

[orangeone]

Sorry should be clear, that my 12 month right to change isn't every 12 months they are reviewed, it's just that you have to be in the scheme for a minimum if 12 months before you can make a change and then if you make a change, you have to wait another 12 months before you can make another.

[baffledmum]

Hi, flowery has posted the same guidance as I on another thread to you. To prevent you from making this change will be discrimination. Don't worry about this being a flex site or not. I would also be upset at the view they are taking - ask for confirmation of what they are saying in writing.

[orangeone]

Thank you for the replies. I have spoken to Maternity Action and have taken on board the advice here and their advice, and will be applying to work formally in writing. I will update when I know more. Thanks again for your help - it is appreciated.

[orangeone]

Update:

Wrote to work formally after advice from Maternity Action noting discrimination grounds. Work written back and still refusing to change vouchers. Told me can increase on return from ML only.

Really annoyed as other than take them to a tribunal (more costs for me that I don't have ), there is nothing I can do. They won't honour their previous agreement to increase my vouchers after 12 months as it makes them liable to pay the vouchers and I feel like there is nothing I can do.