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Childcare vouchers during maternity: employer offering 'compensation'(7 Posts)
I am due to go on maternity leave early next year and I asked my HR department about what happens to my childcare vouchers during this period.
Their official position is as follows:
"XXX provide a limited amount of employer-funded vouchers. So, rather than pay for £243 (maximum amount per month) of vouchers free to the employee on maternity leave, pay compensation for the lost tax and NI savings (circa £75 per month).
This is generous in that it protects the benefits of staff on maternity leave. It also balances the cost implications with the desire to continue offering positive benefits to staff. This position will need to be kept under review as new case law may alter the decision."
My questions are:
Does this mean I have to withdraw from the scheme to be 'compensated'?
Has there been a 'new case law' and can I challenge? (I am in the union)
when i was on maternity leave last year my work continued to pay the childcare vouchers throughout, as well as making the employer contributions to my pension (which i didn't have to match while on ML). As far as i can remember, it is the law that you contintue to receive all 'benefits' while on leave - I don't think my work would have done it otherwise.
And the suggested 75 is in no way adequte compensation. they should be paying the 243 into the childcare acc every month, even when you are no longer getting maternity pay above the SMP (which the govt pays, not them). This then creates a nice stash which is useful when it comes time to going back to work. you will be v out of pocket in the long run.
And a word of warning, the childcare vouchers scheme has been stopped for new accounts, can only do it if in it already. Check that if by stopping for a year you don't lose the ability to use it in the future.
Sounds to me like they are being a bit mean/unfair/illegal, get on to the union...
They can't do that! You ahvev a right to receive the vouchers - they are trying to remove their legal obligations by giving a cash payment.
Bumper - they are also not allowed to close the scheme for new members - it has to be available to all employees in an organisation. I think you may be referring to the restrictions that were placed to new joiners after April 2011, whereby higher rate taxpayers can only get £124 a month tax and NI exempt and additional rate taxpayers can only get £97 a month tax and NI exempt. Basic rate taxpayers can still get £243. Those who were on the scheme before 6th April 2011 can get £243 regardless of their earnings until they change employer or leave the scheem for longer than 12 months.
It's a good point though that if you were a higher rate taxpayer who was on the scheme before April 2011 and were just given £75 a month cash during maternity instead of getting the vouchers you are entitled to you could lose some of the tac exemption because of leaving the scheme for more than 12 months.
By law they should continue paying the ccv. Once you go on Stat Mat Pay/ unpaid, this should not be at your expense. How does £75 compensate for £243?
Yep, they have to continue offering the exact same benefits as if you were not on maternity leave. Hence any bonus, holiday entitlement, company car, childcare vouchers - whatever you receive, you should continue to receive, or they are directly discriminating against you on the grounds of your maternity leave.
I would definitely let your HR department know that you believe the information they have given you is incorrect, and get your union to help you with a response detailing why.
Thanks for all your answers.
I've found that they've based their position on a Kiddivoucher paper where they talk about options for employers: www.kiddivouchers.com/pdfs/Childcare%20vouchers%20during%20maternity%20leave.pdf (see last page).
It looks like a sex discrimination claim would be the only option!
They are wrong (as appear to be kiddivouchers) and are basing it on a popular misundrstanding of salary sacrifice. When you join the scheme you are agreeing to reduce your contractual salary and be given a benefit on top of your new salary. It is not just a case of 'deducting' the amount from each monthly pay (even if that is what happens through payroll). Legally childcare vouchers have to be an employee benefit to qualify for the exemption so it is not ok for employees to 'purchase' the vouchers from pre tax pay.
So when you go on maternity leave it is the benefit of £243 (or whatever) that they have to provide. The benefit stays the same it is just the fact that you are not getting salary that is different.
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