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Childcare vouchers and maternity leave

(14 Posts)
Mumswang Thu 07-Jul-11 11:08:44


I'm about to start a year's maternity leave - hurrah!

cuurently i take £120 a month from my salary in childcare vouchers, TBH it's probably not saving me much, but that's what i have to pay for DS's nursery (1 day a week) so figured i might as well have it in vouchers as pay cash.

anyway, that's by the by, what i've been trying to find out is what happens when i am on SMP.

i've looked at the website for the provider, and i've spoken to HR, and it seems i can continue to take part of my SMP as childcare vouchers.

but then i'm not getting any tax benefit at all am i? because SMP isn't taxed is it?

so, i get almost full pay fo rthe first 6 months of maternity leave, before swithcing onto standard SMP. would it be worth me taking double childcare vouchers (i.e £240 a month, for the first 6 months) and then stopping getting the vouchers for the following 6 months, when i'm not being taxed anyway???

anyone better at thinking logically than me, because i can;t trust my own mind to figure this out grin


Mumswang Thu 07-Jul-11 11:10:30

oh and i'm not a higher rate tax payer if that makes any difference, i earn £26k pa

littlemisstax Thu 07-Jul-11 11:17:03

You can't sacrifice SMP as it is a statutory payment, but your employer has to continue providing the vouchers (I'm on SMP at the moment and getting £243 free a month).

You could up your vouchers to £243 and then get the maximum amount for free (to save up for DC2).

Mumswang Thu 07-Jul-11 13:31:32

so they have to give me £120 worth of free vouchers each month on top of full SMP confused really?

so i would get (for each month i am on SMP) £480ish SMP and however much in childcare vouchers too? on top? for free?

could you point me towards some evidence for this? i've googled but haven't come up with anything definitive

chippy47 Thu 07-Jul-11 13:39:29

6 months on full pay -brilliant! bit jealous -my DP starts next month and gets 6 weeks (plus the company pay the vouchers on top of any other payments when on SMP).

nocake Thu 07-Jul-11 13:44:50

Yes, really. Your HR dept should be aware of this.

- Childcare vouchers are a benefit and you are entitled to keep all your benefits while you're on maternity leave.
- Childcare vouchers work on a salary sacrifice basis - you sacrifice £x of salary each month and get £x of vouchers.
- You cannot sacrifice statutory pay, e.g. SMP.

That means you are entitled to childcare vouchers while on maternity leave but you can't sacrifice your SMP to cover them so your company has to pay for them.

There's a little bit in this article. And more here.

Mumswang Thu 07-Jul-11 13:52:52

Ha, the HR department should be aware of a myriad of things that they are not - sore point there

yes chippy47, I am v v lucky and get magnificent benefits, but get paid diddly squat for what I do, so it's swings and roundabouts.

So should I quickly up the amount of childcare vouchers I claim now, so as to maximise the amount of 'free' ones I get when on SMP?

it seems kind of wrong

Jojay Thu 07-Jul-11 13:57:41

Nocake is right - up your salary sacrifice amount to £243 before you go down to SMP.

Your company can't deduct it from SMP so they are obliged to pay it for you.

Companies don't tend to advertise this perk, not surprisingly, but it is there to be utilised!

Mumswang Thu 07-Jul-11 14:36:30


This is too good to be true!

So is there some kind of cut-off date, what I mean is I can’t really afford to claim the max £243 each month for the first 6 months of my maternity leave. But can I start claiming the max, say 1 month before I go onto SMP, and my employer would have to continue to give me £243 each month for the second half of my maternity leave?

nocake Thu 07-Jul-11 15:03:02

You can apply whenever you like. DW went on maternity leave in December and applied for childcare vouchers in March, while still on maternity leave. However, most schemes restrict how often you can change the amount of vouchers you get. Check the T&Cs for your company's scheme but the one I'm in allows you to change the amount when a significant lifestyle event happens (birth, change in personal circumstances, child starting school etc)

Mumswang Thu 07-Jul-11 15:19:02

ok i've found this from HMRC, which i think is where it is explained, but, and now i'm going to sound supremely thick, i can't quite pinpoint the exact bit which backs this up; would you agree that this part is pertinent?

Making deductions from SMP
Authorised deductions may be made from SMP provided those deductions would have been made from the woman’s cash salary. Such authorised deductions may have been required by law (e.g. PAYE, National Insurance Contributions), or by contractual agreement between employer and employee (e.g. occupational pension contributions); or may be voluntary, reflecting the employee’s personal choice (e.g. trade union subscriptions, payroll giving).
Deductions from SMP cannot be made for Attachment of Earnings Orders or Deductions from Earnings Orders for the Child Maintenance and Enforcement Commission (Arrestment of Earnings Orders in Scotland).
Page 6 of 26

nocake Thu 07-Jul-11 15:34:50

No, that's not relevant. Childcare voucher schemes work by salary sacrifice, not salary deduction, and you can't sacrifice statutory pay. It's as simple as that.

mranchovy Thu 07-Jul-11 17:44:51

This right was given in statute by the snappily titled Maternity and Parental Leave etc. and the Paternity and Adoption Leave (Amendment) Regulations 2008, although it had previously been established by a judgement of the European Court in October 2008.

I wouldn't bother trying to unpick the law though, this is a well known fact in HR circles and understood by every provider of childcare vouchers so if your employer is not very switched on, get them to check with the provider.

The other anomoly the European Court has imposed is that you now need to be paid (or given paid holiday for) all the bank holidays you missed while on Maternity Leave.

Mumswang Thu 07-Jul-11 18:28:53

Thanks Mranchovy that's a big help. At least I can be sure it is true. I hardly believe it, seems bonkers. I'm also cross I missed out the first time around

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