Childcare vouchers and maternity leave - we've gotta fight for our rights!!(141 Posts)
This is a spin off from an ante-natal thread but feel free to join in if you are in this situation - there are currently 3 of us trying to get to the bottom of the new legislation that has just come in.
Vbab&Sparkle - what I meant by 'paying twice' may not affect you if you just receive statutory maternity pay whilst on mat leave - but my employer has quite a generous scheme so I get 8 weeks at full pay, 18 weeks at half pay plus SMP and the final 13 weeks at SMP only - so they can still deduct the vouchers for the first 26 weeks of my mat leave as I am receiving something other than SMP.
However the amount of my maternity pay is calculated on the average I earned during 17-25th weeks of pg so, if I had still taken the vouchers during those weeks, my salary would have been lower (as it would have been on an amount with the vouchers deducted) therefore my mat pay would be based on the lower amount and then during my mat leave, as I receive Occupational Maternity Pay, they would also have deducted the £243 vouchers aswell - so technically I would have paid twice for them - does that make sense?
It doesn't really affect you if you only receive SMP apart from the first 6 weeks.
Anyway, going to work out the figures now as I do think, if it is right that you can't have it both ways, I have picked the best option for me.
But, when I cancelled my vouchers in July, the woman at our voucher provider knew it was so my pay would not be affected and she confirmed I could restart them in September so I am a bit confused about this stopping and restarting business. Will try and find out more.
could you give a better explanation dont really understand what the issue is?
oh so when they calculate your average wage it takes away the childcare vouchers (£243)
so you lose out is that correct?
I am due March and my average earnings are calculated at 15 weeks before due date- so I need to cancel my childcare vouchers for that month and then re apply?
here is a document that explains it.
However, there seems to be a query over whether you can stop it for your qualifying weeks and then restart it so I would definitely make further enquiries about it if I was you.
Ok will do- may as well stop it as I am going to be off work and hence looking after dd anyway
my old employer told me not to take the childcare vouchers when i returned to work after DD1(a few weeks pregnant with DD2). She said i would lose more by having reduced maternity pay than i would gain by taking the vouchers. I don't think this is anything new.
i definately stopped for qualifyiing weeks - due oct, didn;t take vouchers in may and june pay packets but took more in the months before to make up (I don't claim max allowance). I restarted with no problems - HR did this. am with busybees.
It is possible you may lose out if you take the vouchers during your qualifying weeks.
If your DP works for a company that offers childcare vouchers the best option may be to stop claiming them through your employer and get your DP to claim them through his.
The issue over stopping and starting vouchers so you don't lose out on contractual mat pay may not be new - I don't know as I only get stat mat no matter what.
It does appear that if you stop the vouchers before mat leave in order to maximise your contractual mat pay, you may not be able to reclaim them again when you are off.
AFAIK what IS new is that if you have a baby after 5th October 2008 then your employers are legally obliged to continue to provide childcare vouchers (if provided via a salary sacrifice arrangement) for Stat Mat Leave AND Additional Mat leave (before 5.10.08 they are only obliged to provide them during stat mat leave.
Employers also have to provide them without deducting them from statutory maternity pay or stopping them altogether if you don't have enough earnings to cover the cost.
However this does not apply to earnings over and above stat mat pay as this can be deductible.
Employers also cannot seek to regain the money paid on your return to work.
This is due to an amendment to the Sex Discrimination Act which, it appears, many employers do not know much about. As a result some women may have been wrongly advised recently and therefore risk missing out on what they are entitled to.
This is the situation as we (on the due Nov 08) thread understand it from the info we have been given. Whether or not some loophole(s) will be found remains to be seen at the moment...
Sparkletoes - 'Employers also have to provide them without deducting them from statutory maternity pay or stopping them altogether if you don't have enough earnings to cover the cost' - how does that work? Do they reclaim the money from you when you return to work, or do they have to foot the bill themselves for that period?
How very interesting
So if your employer doesn't advise you of this are they practising sex discrimination?
If your employer doesn't let you re-start ditto?
What about busybees/other voucher providers not advising you of this? I discussed this with busybees at the time and was told none of this
Classic case for a class action re sex discrimination I would have thought, I would say this is even more likely than the local council bin men and dinner ladies one.
ceebee74 how much money do you loose exactly (if you don't mind e asking?)
Atarix - yes, the employer does have to foot the bill for the period where you are on SMP - it would also be discriminatory if they tried to claim it back off you when you returned - hence why employers are now kicking off and chances are, I suspect a lot of them are going to withdraw the scheme
1dilemma - I am looking into whether it is discriminatory for your employer not to let you restart the vouchers if you have stopped them during your qualifying period as that is the position I am in. However, when I spoke to my voucher provider when I stopped them, she knew it was because I was pg and agreed I could restart them in September without any issue (just like you Twinkly) so not sure where I would stand. If I cannot restart them, I am going to kick up an almighty fuss because, although the 'free' 3 months worth at the end of my mat leave would be nice, I am not so concerned about that now - but if I can't receive them between now and next May just because I took what I thought was the sensible option (without any guidance being available!) to stop them for my qualifying weeks I will be mighty p**d off because that would 8 months of tax-savings I would have lost out on. (sorry about the rant but I have been thinking about it overnight and it is really annoying me!)
In terms of what I would lose, I did some (very) rough calculations last night - doing what I have done (by stopping them for 2 months) rather than continuing to receive them to ensure I get the 3 'free' months at the end, I am down about £200 this way which did not help my mood last night. It is worse for me because I would only qualify for the 'free' months for my last 3 months of my mat leave whereas those of you who only receive SMP would benefit from the full 9 months of 'free' ones.
my head is spinning, it's all too technical. If I call my provider (Accor) would they explain my options to me or do I have to investigate this myself? Currently pg with DC2.
The way I read the fact sheet, it is very clear that you have to choose:
a) Continue with the salary sacrifice until Mat leave, and continue to receive vouchers.
b) Leave the scheme and not receive vouchers during mat leave.
There is no option C, of stopping and restarting, which would be having cake and eating it.
Then the issue goes to whether they should be calculating the pay in weeks 17-25 as before or after your childcare voucher sacrifice, to avoid your pay being double-dipped.
Firstly I am not an accountant nor a lawyer so I do not know the finer details regarding all this. Only what I have read on the internet on HMRC website and others.
I can post a link to these for anyone who also wants to look into this further. I have summed up the situ as best as I can in my initial post.
From the info I have read the employer has to pay for vouchers even if you only get stat mat pay or don't have enough earnings during mat leave to cover the cost.
Obviously this opens a whole can of worms as it will undoubtably lead employers to feel that they are now losing out over this issue. Perhaps some will now reconsider offering them? I don't know what will happen (and neither do many employers it appears).
However I have raised this with my employers as I felt that if I didn't then not only would I miss out on the benefit of this legislation when I go on mat in November but, someone else is bound to raise it eventually so if they decided at that time to stop the scheme I would lose out anyway. It will be law after 5.10.08 and as far as I am concerned employers cannot be seen to be ignoring this. Ignorance of the law is no excuse after all.
The info also suggests that if employers do not honor this obligation then yes they leave themselves open to a claim under the amended Sex Discrimination Act.
It is very difficult to advise anyone on specifics as all companies operate differently regarding maternity pay. As already stated if you are given any money over and above stat mat pay then this IS deductible.
The issue over stopping and starting vouchers is unclear as far as I can see. I haven't researched it as it doesn't apply to me and I cannot see any info on it on the websites I have seen. Again this is all very new legislation so not all issues/circumstances will have any prescedents set at moment.
I am still waiting to hear what my own employers say over the matter, they clearly did not understand the legislation last time I spoke to them tho!
Here are some links:
Daycare Trust Info
Lou - I think you have pretty much hit the nail on the head with it - but my point is that there was no guidance 2 months ago (as the law had only just been amended) so I did what I thought was the best thing to do - however, this may not be the case and I may lose out financially. Fine for people who are now in that position as there is all this information available and they can make their own mind up about what is the best situation for them.
Gingerninja - I don't necessarily think your voucher providers are the right people to speak to - someone on my AN thread was advised to stop receiving the vouchers which, may now appear not to be the correct advice. I think it depends on your circumstances and what your employer's maternity pay scheme is.
Thanks ceebee and thans for drawing this to my attention.
When I went back after dd I was told that taking childcare vouchers might reduce future maternity benefits - when I did rough calcs I found that the tax benefits from a year of childcare vouchers was slightly better for me than the increase in maternity pay from not having the vouchers. So it was marginal either way and had it taken me more than a year to get pg again I would be better off with the vouchers than not. It hadn't occurred to me that I could stop vouchers before the relevant weeks that my mat pay this time round was based on - still - too late now!
Hi Ceebee, Sparks & vbab and others
Just wanted to add my two penneth worth - it seems as though people get given bad/out of date advice and this is now going to affect them financially. I deal with varying requests at work and know that contacting your local MP is well worthwhile. It may seem a real hassle or not important enough, but that is what they are here for. If you were badly advised by a nursery or other organisation, then a letter on official paper goes a long way.....!
Let me know if you need me to find out your local MP or if I can help
Autumn - thanks for popping over I never think of contacting my MP tbh but maybe I should - depending on what happens in September regarding my vouchers and whether they are restarted or not.
My local MP is a very senior member of the Labour Party (not sure which party you work for!) and I suppose I think he doesn't have time to be bothered by minor issues although I am sure they have backroom staff who actually deal with it right?
Excellent suggestion AutumnLady hadn't thought of that...
Ceebs, am I right in thinking that the arrangement to stop your vouchers is between you and the voucher scheme who agreed to it. At the moment no one at your work really knows about it?
In that case it would depend on whether someone in the know at your work picks up on the fact that your vouchers have stopped and will be restarted and intervenes to stop this... In bigger organisations I would think this is unlikely??
I would therefore continue to keep schtum about this at your work as surely once Sept comes and the vouchers (hopefully) restart then it would be too late to stop this? Do they restart at beginning of Sept as that is not long to wait and find out. Also think that the voucher scheme company okaying the matter without indicating they vouchers may not be restarted could help you here. I understand there was no guidance from your employer to state this could happen so you will surely have a good case if it came to anything...
I don't know about the whole issue over employers deciding to withdraw childcare vouchers altogether in future... They would obviously have to assess the financial risk to them and weigh this up against the fact they would no longer be offering a very valuable benefit to their staff. I CAN see them putting a stop to people increasing their vouchers before they go on maternity tho as this would obviously increase their obligations.
Sparks - your assumption is correct and I am hoping that no-one will notice. My 2 colleagues in my office know about it (because obviously we have to know this to be able to advise other employees) but are on my side so they won't say anything. The invoice actually comes in our office for checking (one of my colleague does it) - it comes in around the 10th of the month, we check it and our manager signs it (but doesn't check it and she is not really aware of all the issues so wouldn't think anything of me restarting them) and then it gets passed to Finance. The only stumbling block is possibly our payroll department who may be more on the ball about these things than I think they are!
As you say, once they have restarted, I can't see how they can stop them again but I guess time will tell.
ceebee & sparks - back in work tomorrow for my last day before SML. YIPPEE!!!
Do you think I should just send an email to the guy who handles admin/payroll stuff, as on holiday until monday, saying I want to restart the vouchers and just see what happens?
stupid thing is not only did busybees advise me badly about canceling the vouchers but I also probably stopped them too late to make any difference to my SMP calc. As I was 28wks when I canceled.
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