Childcare vouchers: can anyone help?

[Woodlands]

My DS is about to start at nursery, where the fees will be £100 per week. Both my husband's and my job participate in childcare voucher schemes - and the maximum we can each claim is £243 per month, so it totals higher than our childcare costs. What I still haven't understood is exactly how it will work paying for childcare. My work scheme is with Edenred, whereas my DH's scheme is with ComputerShare. I have already registered to receive the maximum amount but my DH hasn't done anything about it yet.

Can anyone advise on how they work and how we go about paying the right amount to nursery? The nursery suggested we could bank the extra in case we want to up our hours in the future, which is certainly a possibility. Or should my DH just claim the exact difference between my £243 and the monthly fees? Am confused!

[LoopyLoopsTootyFroots]

Basically, you don't have to pay income tax and NI on that amount, so depending on how much you earn (use the highers earner's first) you could save about a third. Just contact the comapny, get the reference number form nursery and set up an account.

[LoopyLoopsTootyFroots]

You will be given an account (online probably) where you select how much to take from your bank account each month, and how much to give to nursery. IT really is very simple.

[WhatWouldLeoDo]

Do Edenred offer paper or electronic vouchers? If electronic vouchers, you will set up an online account and set up a standing order type payment to your nursery. It's fine that you and your DH have different providers - you will just each have your own account. You will need a registration number from the nursery to set up your payments. If it's paper vouchers they will be sent to you and you simply arrange to give them to the nursery. Online is much easier ime.

I would set up the account to pay the exact amount you need each month. If you think you might want to bank some extra for the future, bear in mind that electronic vouchers usually have no expiry date but paper vouchers might.

My nursery fees are due to go down in September, so we will keep claiming the maximum and 'bank' the extra vouchers in our account to be used in the future. Useful if you might have another DC and they'll both be in nursery at the same time, or if you're likely to need extra ad hoc days etc.

HTH.

[KangarooCaught]

You can bank the extra/store it up - if you have no need of the money now and know that you are going to spend it on childcare. You can't claim it back as cash if you don't spend it as it's a tax benefit. Remember though that chilldcare gets cheaper in the term after their third birthday. I have mine stored from maternity leave but my childcare bills are exorbitant!

[madrush]

The voucher orgs are all very good at organising this and it normally works very smoothly.

If you think your childcare costs will increase over the £486 max monthly in the future it may be worth banking extra money in the scheme, but you don't need to, you can get your dh to apply for just what you need. You can also change this (sometimes restricted to annual changes but usually flexible each month).

You'll give your scheme the details of the nursery to pay and how much to pay each month and they'll sort it out between themselves. Most nurseries are well used to dealing with more than one scheme for the vouchers.

It's not often you get something tax free and simple!

[madrush]

The voucher orgs are all very good at organising this and it normally works very smoothly.

If you think your childcare costs will increase over the £486 max monthly in the future it may be worth banking extra money in the scheme, but you don't need to, you can get your dh to apply for just what you need. You can also change this (sometimes restricted to annual changes but usually flexible each month).

You'll give your scheme the details of the nursery to pay and how much to pay each month and they'll sort it out between themselves. Most nurseries are well used to dealing with more than one scheme for the vouchers.

It's not often you get something tax free and simple!

[Woodlands]

Thanks all, I'm glad to hear it normally works smoothly. I have applied with Edenred and they've said they will send me details of how to use my online account later next month. I guess we'll just pay weekly by bank transfer until the start of September and hopefully everything will become clear at that point!

We will have a chat about whether to bank vouchers or just claim the amount we need.

[gourd]

You can start claiming through your salary sacrifice scheme as soon as you're on your full salary (not on statutory maternity pay) and the vouchers sit in your voucher account till you use them. They don't expire till child is 15 so you can save up unuised money and use it at any point in that time. Both my partner and i can claim £243 but we dont, becasue our childcare costs are a ltitle less and I dont want to lose pay that I'm not then usuing for childcare if you see what I mean. You can increase or decrease the voucher payments you receive (up to the maximum limit) as well as what you pay out, on line, so if your child care costs increase or reduce once LO is at school, you can make any changes to payments in and out very quickly and easily.

[SarkySpanner]

I would start off with both of you paying the maximum.

but two things to think about...

1. if one of you does lower your contributions below this maximum then it should the one on the lower tax rate (if they differ)
   
   
2. check out the restrictions on changing the amount you pay in. Many schemes only allow you to change this if your circumstances change and may limit the number of changes per year.

[nocake]

You can claim childcare vouchers when you're on maternity leave. You don't have to wait until you go back to work. There's a nice little loophole that means if you're on SMP then your company has to pay for the vouchers as they aren't allowed to salary sacrifice statutory pay.

[PurpleCrazyHorse]

We use EdenRed and they're really easy. All done on line via their website direct to our CM (she supplied us with her EdenRed reference number). Our CM costs are more than the voucher maximum (DH not eligible) so we top up the fees with the extra from our bank account.

Very easy and no problems with payment not reaching our CM.

[seeksnewnamewithgsoh]

Sorry to hijack, but how exactly does it work with vouchers being paid while you're on SMP?

It is a situation that I'm hoping will affect me in the future (we're planning more children), but I can't work out how my work will pay the voucher.

[seeksnewnamewithgsoh]

By 'my work', I mean 'my employer'. My inner pedant was horrified when I read that back

[nocake]

Childcare vouchers are a benefit therefore you remain entitled to them while on maternity leave (just like your other benefits, e.g. medical insurance). The vouchers work on a salary sacrifice system, which means you agree to give up £x of salary in exchange for £x of vouchers (that means you don't pay tax on the £x).

You are not allowed to sacrifice statutory pay so when you're on SMP your employer can't reduce your salary by the £x. However you are still legally entitled to the childcare vouchers as they're a benefit. So your employer has to give them to you without being able to take any money for them.

You don't have to be claiming them before you go on maternity leave. You can start claiming them whenever you like.