When to stop salary sacrifice to maximise SMP

[sleepyhead]

I currently buy £110 of child care vouchers through salary sacrifice to pay for ds's afterschool club. I'm now pregnant with dc2 and trying to work out exactly how this is going to affect SMP and what to do about it.

• Due date is 6th April 2013
  
• Qualifying week for SMP is then ?w/b 17th Dec - 15 weeks before
  
• SMP is worked out at average over the 8wks before qualifying week which would take me back to 22nd October I think.
  

I'm planning to take 6months mat leave and for all of this would be having some Additional Maternity Pay paid by my employer. My understanding is that the cost of the childcare vouchers would be deducted from this AMP so there's no advantage to me staying in the scheme while on leave.

So...

• Should I contact the CCV scheme now and stop the vouchers for October pay and November pay (am paid on last Thursday of the month) to maximise SMP?
  

• But then have the vouchers deducted from Dec-Mar pay as ds will be in afterschool?
  

• And then stop again in April as ds will be out of afterschool for at least 6 months (possibly 12 if dh takes some leave too).
  

• And then start when I go back to work to save for future childcare costs...
  

I know I really need to go and see HR but I was hoping to avoid telling work for another few weeks and it seems by my calculations that I'm going to have to do something about the vouchers pretty soon.

[kekouan]

I didn't think the vouchers were allowed to be deducted from SMP? They're seen as a work benefit so should continue through your mat leave.

[kekouan]

Prepared to be corrected :)

[sleepyhead]

They can't be deducted from SMP but they can from additional mat pay that your employer pays (I think).

I'm lucky in that I'll get 6 months half pay so they'd deduct the vouchers from that. If I took the additional 6 months at SMP and no pay then I think I might get the vouchers "free" for that period, but the plan is to return to work after AMP stops.

[kekouan]

Sorry, misunderstood

[emsyj]

If they're salary sacrificed, they're a non-cash benefit and have to be paid in addition to both statutory and contractual maternity pay - they cannot be deducted from any pay that you receive as they are a benefit paid to you following a contractual reduction in your salary. This is all explained on the HMRC website somewhere. The law changed in (I think) October 2008 regarding your rights during Additional Maternity Leave and they are now the same as those during Ordinary Maternity Leave, so you are entitled to receive them throughout.
It's all explained in this HMRC leaflet: www.hmrc.gov.uk/employers/sml-salary-sacrifice.pdf

[twinklytoes]

I had to stop mine around the qualifying weeks (i think its 17-26 but can't remember) in order to maximise the amount I'd get in SMP. I had no intention of using paid care during maternity leave or could "bank" with childcarer as would have 3 requiring care and this wasn't guarenteed as spaces available.

But I would only do this if you don't intend to make use of them during maternity leave. If you do intend to use them for older sibling or can guarantee both children will be using the same childcarer when you return to work, then I would continue with getting the vouchers...as everybody says they have to be paid above SMP.

If you are going to stop then just ask your HR dept what the qualifying weeks are.

[WidowWadman]

emsyj - that's incorrect - if employer pays anything in addition to SMP (including pay for KIT days) they can be deducted from that additional pay