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Question about childcare vouchers and SMP

(10 Posts)
backintraining Fri 02-Sep-11 20:18:51

I was wondering whether anyone had any knowledge on this: I have just started my maternity leave (baby due in a few days). We already have a DS who goes to a childminder when I work 3 days a week. Between us, my husband and I do the salary sacrifice and "buy" childcare vouchers each month. The plan is to drop DS's childcare to 1 day a week when the baby has arrived so we will still by buying some vouchers. Today my friend said to me that once the mother has gone on to SMP then legally (her words) the company have to pay for/buy the childcare vouchers, it does not come out of the mother's "salary" (or SMP rather).

Our maternity package is pretty good, I get 13 weeks at full pay and then the remaining weeks at SMP. So my understanding - if what she is saying is right - is that for example if I "sacrifice" £100 per month, once my 13 weeks full pay finish and I go on to SMP, I don't sacrifice the £100, but my employer foots the bill.

Has anyone heard of this? I thought she was mistaken because it sounded a bit too good to be true and I have certainly not come across this before. I asked whether it was just her company as obviously different employers have different policies, but she was adamant that it was a LEGAL obligation of any company. I'll give our HR department a ring on Monday but I just wondered if anyone on here knew.

Thanks for reading.

BikeRunSki Fri 02-Sep-11 20:29:36

Your friend is right - I have been looking into this a lot recently as I am about to go on mat leave with DC2 and DS is already in nursery 3 days a week. If your employer offers you CCV, then they have to pay them for you when you go on mat leave, it's a loophole in the law because an employer is not allowed to reduce your benefits just because you are on mat leave. So I get to keep my company car, phone, laptop and pension payments too, The only stipulation regarding CCV and SMP is that you have to spend the CCV the following month, It basically means tht DS will be able to stay at nursery 3 days a week. It is also why many small businesses are reluctant to offer CCV in the first place.

runningmonkey Fri 02-Sep-11 20:33:06

Yes it's right. I've just gone onto smp and have had my full ccv this month smile the timeframe for spending them depends on which ccv company your employer uses I believe (I don't have one for mine!)

Sam100 Fri 02-Sep-11 20:33:46

You need to check with your employer. There have been some HMRC developments over the few years regarding all sorts of different salary sacrifice arrangements which are quite complex and not all company schemes are identical. This is an extract from here. But they key bit is below:

Paying SMP
No contractual agreements can exclude, limit or otherwise modify SMP payments due. Therefore any SMP payable must be paid in full and in cash, for up to 39 weeks, regardless of any contrary contractual arrangements. In particular, the SMP payable cannot be further reduced by the terms of a salary sacrifice arrangement.

Contractual maternity pay (e.g. Occupational Maternity Pay as in Example 4), however, is different. A salary sacrifice arrangement can reduce not just salary entitlement; depending on the terms of the contract, it can reduce also an employee’s entitlement to contractual maternity pay which is payable in excess of SMP.

milkysmum Fri 02-Sep-11 20:35:34

Definatley true- I couldn't believe it myself when I found out! (due to start maternity leave later this month)

Mercedes519 Fri 02-Sep-11 20:36:26

Yes yes yes! It's from an EU ruling so it's a legal compliance every employer must do but very few actually tell you about it in the hope you'll stop the vouchers voluntarily.

I had no time limit on mine and actually built up a nice little pot by the time I went back to work as DS was at school while I was off.

stella1w Fri 02-Sep-11 22:27:10

I am on SMP only but still get childcare vouchers from my employer - they are not taken out of my SMP - employer has to pay for them!

backintraining Sat 03-Sep-11 10:54:41

Wow thanks for your replies. I will definitely be giving HR a ring on Monday and my mate a big kiss for telling me this - bloody typical, our company is pretty switched on with part time/flexi working/mat leave etc but they do like to leave the "little beneficial" details out! We had planned to stop the CCV pay coming out of my wage and swap it over to DH's, obviously we'll be better off doing it this way.

Thanks again.

Ellypoo Wed 07-Sep-11 13:09:04

Well, we have just gone through this at work: an employee has ccv's and pays through salary sacrifice. While she is off on mat leave, the salary sacrifice can't legally be taken from SMP, and so she can't have the ccv's for this period.
As her employer, offering ccv's through a salary sacrifice arrangement, this in no way means that we are obliged to pay for her ccv's while she is on mat leave/smp - we checked this with the ccv provider & HMRC for clarification.
I guess it depends on how your ccv's are set up - the way that we offer them in no way obligates us to pay for them when/if an employee is not able to pay for them themselves through the salary sacrifice system.
I would be interested to know what your HR say - can you post an update?

Ellypoo Wed 07-Sep-11 13:12:34

From reading BikeRunSki's post, it appears that her ccv's aren't offered on a salary sacrifice basis (which basically means that the employee pays for them themselves, but the payment is deducted from gross salary each month) - in that case, they are a benefit offered by the employer, as the employer pays for them anyway normally, and as you are entitled to all benefits of employment during mat leave except pay, that is why she is entitled to still receive them and the employer pays for them.

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