Childcare vouchers stopped whilst on SMP

[bunique]

Think this is the right place but if somewhere else is better let me know!

Just had a call from my childcare voucher provider to say they've been informed by my employer that I'm now down to SMP so they have reduced my vouchers to zero until I let them know I'm back at work.

My understanding was that childcare vouchers should continue to be paid? I know this seems to be a hazy issue. Can anyone advise?

[TeamBacon]

Mine stopped when I went down to SMP, I thought that was what was supposed to happen?.

[fastdaytears]

I'm not sure how they would continue as you don't have any salary to sacrifice. SMP doesn't come from your employer- they just pass it on.

[northdownmummy]

I'm pretty sure they should continue. It's seen as part of your overall salary packages and I recall something about discrimination of stoppef

[StonedGalah]

Hopefully someone will be along to confirm but l think they do need to be continued to be paid by your company.

[northdownmummy]

Heres a link whichentions the relevant legislation protecting your vouchers during maternity leave

vouchers.employersforchildcare.org/media/Childcare%20vouchers%20during%20maternity%20leave%20(parents).pdf

[bunique]

Apparently (from a doc by the voucher company):

"If an employee has insufficient non-statutory pay to cover their voucher order, HMRC believes their employer should make up the balance. If an employee is not receiving any non-statutory maternity pay, then HMRC believes their employer should fund their full voucher order."

[MrsCampbellBlack]

They should be paid when you're on SMP

[bunique]

How would I go about challenging it, if indeed it can be challenged? With the changes to tribunal rules, they will know it's unlikely I'll be going the whole hog for £600 of vouchers between now and when I go back to work!

[bunique]

Thanks for the link above. This, from the provider, suggests it's less clear cut: www.kiddivouchers.com/pdfs/Childcare vouchers during maternity leave.pdf

But that the safest option is to continue to pay. Hmmmm.

[startwig1982]

Mine continued the entire time I was on maternity, even the last 3 months as they're not supposed to reduce them.

[MrsCampbellBlack]

Well I'd speak to your HR department for a start and suggest they've made a mistake.

[drspouse]

They have made a mistake. I looked into this because our employer scheme is worded really badly and though it doesn't say they will continue to pay them, they have to (as per HMRC rules) but it also doesn't say you can't change your scheme (I wanted DD to start workplace nursery before I went back); but changes to your benefits aren't something HMRC make them do (i.e. my employer wasn't breaking the law, just advertising their scheme really badly).

www.maternityaction.org.uk/sitebuildercontent/sitebuilderfiles/commonmaternitypayquestions.pdf

"Can my employer deduct the value of
childcare vouchers from my SMP?
No, you are entitled to your SMP in full.
Childcare vouchers are considered to be a
non-cash benefit which you continue to be
entitled to during your maternity leave even if
you are no longer earning any salary that can
be sacrificed. Your employer cannot sacrifice
your SMP and must continue to provide
childcare vouchers as a benefit during
ordinary and additional maternity leave."

Sounds like Maternity Action would be someone really good to contact. Or just send HR that fact sheet.

[bunique]

Thanks - will do - am popping in to work this week so will try and pick up a copy of maternity leave/pay policy

[bunique]

Thanks DrSpouse- MatenityAction may be just the thing I was after! Not sure our union reps will be too hot on SMP and vouchers!

[littletike]

I believe they should also continue but some companies stipulate any paid for by them need to be used within a month.

[ShootTheMoon]

I've just been through this with my work and they have indeed agreed to pay my vouchers - though on a non-precedential basis apparently.

I'd agree that maternity action is a good place to start.

The advice that my company's legal adviser provided was roughly as follows:

Childcare vouchers and maternity leave

Whether childcare vouchers need to still be provided by the employer throughout maternity leave depends on whether they are "remuneration" (which does not continue during maternity leave) or non-cash benefits (which do continue during maternity leave).

Guidance that has been previously published by HMRC in the UK indicated that it is clearly of the view that childcare vouchers are non-cash benefits rather than "remuneration", even if they have been provided by way of salary sacrifice. HMRC's guidance is non-binding and there have as yet been no test cases on this issue. However, the fact that the vouchers are non-transferable, cannot be converted into cash by the employee and are payable to childcare providers rather than the employee, suggests that they are unlikely to be considered "wages or salary" and are in fact non-cash benefits.

SMP cannot be sacrificed to fund the vouchers, their provision is therefore usually just seen as part of the financial costs of the scheme and in the round the employer’s NI savings still usually make the scheme attractive overall.

[prh47bridge]

there have as yet been no test cases on this issue

There has been a case - Donaldson v Peninsula Business Services. Peninsula operated a salary sacrifice scheme allowing employees to get childcare vouchers. Mrs Donaldson wished to join the childcare voucher scheme while she was pregnant. She was refused entry because she would not agree to her membership of the voucher scheme being suspended while she was on maternity leave. She took the case to tribunal.

The tribunal found that childcare vouchers are a non-pay benefit and therefore are protected under the Maternity and Paternity Leave Regulations 1999. They found that the employer's action constituted pregnancy and maternity discrimination contrary to the Equality Act 2010. Mrs Donaldson was awarded £1,861 for her financial loss plus £3,500 for injury to her feelings.

The rules are therefore clear (and some of the posts on this thread are wrong). If you are receiving childcare vouchers under a salary sacrifice scheme your employer must continue to provide them throughout your maternity leave. Failure to do so is discrimination.

I suggest you mention Donaldson v Peninsula Business Services to your employer and point out that their actions constitute pregnancy and maternity discrimination.

[bunique]

Brilliant! Thank you

[ShootTheMoon]

Genius, that's good to know prh47. So much for our legal advice

[TheRealYellowWiggle]

I cancelled mine during both MLs as I didn't know about this - it certainly isn't widely publicised by employers!

[DreamingOfADifferentMe]

Mine also carried on when my salary went down to nothing, and because it's considered a benefit, my employer paid for them as to stop them is considered discrimination. At the time I worked for a huge organisation and I only found out about it by accident as they kept very quiet about it. In fact, most colleagues cancelled theirs as a means of saving money.

[bunique]

Email sent - will update with their reply!

[bunique]

Prh47 - does the outcome of the tribunal trump an existing policy?

[prh47bridge]

Yes. This is a legal ruling. The law always trumps company policy. Companies don't have to alter their policy to comply but if they don't they will lose at tribunal. If your employer still refuses to budge I'm afraid you will have to go down that route.

Basically it means that any employment tribunal will find that a company policy to stop CCVs while the employee is on maternity leave is guilty of discrimination. All future tribunals must follow this ruling. It can only be changed by the employment appeal tribunal or a change in the law. So if you do take the matter to tribunal your employer will lose if they are foolish enough to contest the case.

[bunique]

Thank you so much for that. I've been told it's been handed over to legal to consider. I'm not holding my breath!