contactual benefits when on maternity leave

[dinkyboysmum]

I currently purchase £243 per month of childcare vouchers offf my employer. am i right in thinking that, when i am on maternity leave, my employer still has to provide me with Childcare vouchers? but that they cannot deduct the £243 from my SMP?? therefore, i will be effectively receiving £243 per month of 'free' childcare vouchers???
If this is the case & when they realise it...can they stop offering childcare vouchers?? or is this some sort of discrimination. i think there are only two other employees who use them.

[RibenaBerry]

That's a bit of a nightmare question Dinkyboysmum.

The basic answer seems to be yes, as a benefit it has to continue during maternity leave and so you get it on top (It can be deducted from enhanced company maternity pay, where applicable).

As to whether this makes employers stop offering childcare vouchers long term, there is a fear that this may be the case. Whilst it's great for those who get the vouchers, it isn't really fair when you think about it that you could end up so much better off during maternity leave than someone having their first baby, or who has chosen not to sacrifice salary for childcare vouchers. Also, when these schemes were introduced, they were sold to employers as 'and it won't even cost you anything'. Big employers can absorb this type of cost in most cases, but for small employers it can really put a squeeze on the finances. If your employer were thinking of discontinuing the vouchers, there would need to be a consultation with affected employees, so it's not something that they could just do to you because you were going off.

HTH.

[dinkyboysmum]

i know...although it is a huge benefit for me personally, i admit it sounds like madness!
so, they cant stop them for me as an individual, they would need to stop them for the whole company....but they can still do that?? what would 'consultation' involve? do they need to give notice?

[RibenaBerry]

It all gets a bit complicated. It depends to a certain extent whether the benefit is contractual and also what approach they choose to take.

Bascially, consultation would normally involve notifying everyone of the proposals, giving those affected the chance to give input, considering those comments and then implementing the change. Depending on the exact way the right works in your contract, you may even be dismissed and offered a new contract on amended terms and conditions (i.e. exactly the same job and contract, but with no vouchers). The consultation also normally involves discussing ways of smoothing the change for those particularly badly affected (e.g. a transition period). It's hard to say in too much detail without seeing your exact contract and knowing exactly how your vouchers work.

You don't say how big your employer is, but if only a handful of people use this benefit, I wouldn't worry too much. For most employers, it is more hassle than it is worth to discontinue, and they lose a lot of goodwill. The people who have been hit hard are those who maybe only have a dozen employees and two or three go on maternity leave having taken up vouchers.

[dinkyboysmum]

hmmmm, but thinking about it, my childcare vouchers arent detailed anywhere in my contract. my employer only starting doing them last year after a few of us requested them. didnt get anything in writing from my employer & certainly no change to contract...is this a problem?

[mumof2222222222222222boys]

I am pretty sure that you are entitled to the £243 vouchers even though when you ae on ML and only in recipt of SMP, it is a huge additional cost to the employer. Yes it may make them rethink the scheme...but they need to weigh up the costs. Each employee on the scheme saves the company £370 pa, so if less than 15% roughly of the employees are on ML at any one time, it is still a net gain. You would need to do teh figures for your company (or they would)...but basically you get the vouchers at the moment.

[beepbeep]

Are these the vouchers that are normally paid out of your salary (e.g. busybee) and are non tax deductable? Just wondering as i also pay out of my salary for these and will be going off on maternity leave in a few months. Ta

[RibenaBerry]

Dinky - it doesn't matter whether the benefits are detailed in your contract for the purposes of you getting them during maternity leave. Sorry if I confused you. That was just relevant to the exact way the company would go about consultation if they wanted to discontinue the scheme.

I wouldn't fret too much about the possibility of the company stopping the vouchers. As mumof2 says, there's some detailed maths and benefits to employers to keeping going. I would just focus on the fact that, yes, you should get these when you go off and checking that that happens.

Beepbeep- yes, Busybee are the type of thing we are talking about.

[beepbeep]

Ribena - this is what it says on the childcare vouchers.co.uk website

"What happens if I go on maternity leave?
This is a 'lifestyle change' and you can decide either to leave the scheme and stop receiving childcare vouchers, or to change the value of vouchers you receive.

If you are entitled to Statutory Maternity Pay (SMP), you may choose to leave the scheme before the 8 weeks reference period on which SMP is calculated to reduce the impact of salary sacrifice on your level of SMP.

Once you start receiving Statutory Maternity Pay, it will not be regarded as a qualifying salary from which a sacrifice can be made. Therefore, if you are receiving any form of Statutory Maternity Pay you will not be able to exchange it for childcare vouchers."

I'm confused!?!?!

[RibenaBerry]

Beep - that paragraph is about different things. I've pasted what they've said below and then added the (hopefully!) plain English explanation!

"What happens if I go on maternity leave?
This is a 'lifestyle change' and you can decide either to leave the scheme and stop receiving childcare vouchers, or to change the value of vouchers you receive."

This is just explaining that people who don't want the vouchers any more - for example because their older children won't be in childcare whilst they are off- can stop them.

"If you are entitled to Statutory Maternity Pay (SMP), you may choose to leave the scheme before the 8 weeks reference period on which SMP is calculated to reduce the impact of salary sacrifice on your level of SMP."

SMP is calculated on your post salary sacrifice salary. Some women therefore want to stop the vouchers for the 8 week reference period (which runs from about week 17-25 of your pregnancy) used to calculate SMP to boost their salary during that time and make their SMP as high as possible. For most women, this would only affect the 6 weeks you get at 90%, so it's often not worth the hassle/doesn't work out particularly beneficial. However, if your salary after the sacrifice is low enough that you wouldn't qualify for SMP, stopping the vouchers for the few weeks when SMP is calculated can make a real difference.

"Once you start receiving Statutory Maternity Pay, it will not be regarded as a qualifying salary from which a sacrifice can be made. Therefore, if you are receiving any form of Statutory Maternity Pay you will not be able to exchange it for childcare vouchers."

This is true, as far as it goes. SMP is not salary you can swap for vouchers. For example, you might want to start your first child off in nursery a few weeks before you came back to work. If you were receiving SMP during this time, you couldn't sacrifice that SMP to buy childcare vouchers, because you cannot pay for them out of SMP. You have to pay for them out of salary. However, once you have done the salary sacrifice (for example, you are back at work after your first child, are using vouchers and then want to go off again), the best analysis is that the vouchers become a benefit and, because benefits have to continue during maternity leave, you keep getting them even though your employer cannot deduct the money from them from SMP (but, as I have mentioned, probably can from company enhanced maternity pay). Effectively, it means that some lucky women get the vouchers for free during second and subsequent pregnancies!

Is that any clearer?