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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?

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.

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