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childcare vouchers and maternity pay(22 Posts)
If anyone knows employment law well if appreciate some advice.
I'm currently on Mat leave with dc3 and having issues with payroll and pay. Im nhs so am entitled to 8 week's full pay, followed by a period of 50% plus statutory. However My pay has come in lower than expected and following many conversations it transpires that they have calculated my 'full pay' on my pay after any salary sacrifice deductions. I'm my case this is following a deduction of £248. I'm still in the childcare voucher scheme so I'm still revieceing vouchers but I'm still also having this deducted from my maternity pay. So essentially I'm having it deducted twice. Does that make sense?
I've spoken to maternity action who cited a recent case (peninsula) where following appeal it was ruled that employers can stop cv salary sacrifice when an employee is on maternity leave and on SMP. But this doesn't really explain why I'm being doubled charged for my cv vouchers. It's a big issues as I've financially planned for this year off based on an expected income and we're are left short which will mean I'll probably have to return back to work early or get into debt.
I'm.planning to contact my union but I'd welcome any thoughts as I'm not sure how helpful the union will be given maternity action left me feeling they didn't quite get it.
I found this on the gov website but I think it is not the answer you are looking for.
Contractual benefits and Salary Sacrifice
The calculation of Average weekly earnings for SMP is based on earnings which are subject to Class 1 NICs. Some contractual benefits, such as childcare schemes provided by you, may be exempt from PAYE tax and NICs.
So it looks like they've calculated correctly by basing your pay on the amount after vouchers are taken off.
I can see why you think you're hard done by. Would it be worth pausing your vouchers when you're on mat leave do you have some more cash?
When you go to SMP entirely, if you do, would they pay your childcare vouchers then? I know there was a recent employment tribunal case which made it more unlikely, but is it worth a try?
It is correct that your maternity pay is calculated on the pay after deduction of salary sacrifice.
What most people don't realise is that you can't salary sacrifice SMP. I'm not sure how this works if you receive more than SMP, but on SMP you receive the full amount of vouchers in addition to your SMP.
Incidentally, I discovered this about 3 years after my maternity leave, my employer corrected their error once I provided proof
If you receive more than smp then salary sacrifice comes out of that bit. I could request the number of weeks my occupational maternity pay was paid over, so I got a lump sum leaving me solely in receipt of smp. This meant my employer had to pay my childcare vouchers. However, it may be that the case of mentioned supercedes this. Could this be in the remit of acas for clarification?
Well the bad news is that your Employer is right and you are not paying for the vouchers twice To get the childcare vouchers (and associated tax benefits) you agreed to lower your base salary.
I do think that a lot of employees jump into salary sacrifice schemes without fully understanding how they work. Employees focus on a reduction in tax and NI as well as getting a benefit such as childcare vouchers. They don't see that they have lowered their base pay, which affects things such as mat leave pay which is worked out on your base pay!
I assume that you've made a calculation on your salary scale point, forgetting that you have agreed to receive less than this amount - although the Gov does allow for people to leave schemes due to 'lifestyle changes' such as pregnancy this won't help your mat leave pay unfortunately, as that is calculated on the pay you were receiving earlier (which was lower than your scale point due to the salary sacrifice).
Hi thanks Everyone. As some have said the rule that employers say your childcare vouchers once you are on SMP has changed and they no longer have to do this.
Cotswold I calculated my mat pay based on what I have had during my 3 previous mat leave periods as my salary has not changed. It is lower this time. I was never notified that there would be changes to my many. I assume the changes are a result then of the peninsula case and have resulted in my employer deducting for my vouchers where as previously there were not deducted for - I'll need to dig out old pay slips.
Your pay is calculated on whatever you earned during your qualifying weeks (go to the government webpage for the definition). This is why people cancel salary sacrifice things for this period sometimes, and work overtime etc. I couldn't go without the salary sacrifice item so I did additional hours wherever I could.
So it's the fact that you are paying for the vouchers, and not your maternity pay that is the issue? What does your maternity leave policy say about the salary sacrifice schemes?
Bit of information about the Peninsula V Donaldson case. The employee raised the case because she was denied entry to the (voucher) scheme because she refused to agree to the condition that the scheme was suspended during periods of maternity leave.
Yes your SMP is based on your pay after the salary sacrifice so depending on the numbers, you should have come out of it if would have been financially better for you. Did you get a leaflet / details of the policy when you signed up? For me, it also meant that my reduced salary (after the salary sacrifice) would have been used for other benefits - death in service benefit / redundancy pay etc.
I know it's easy to be wise after the event but the best strategy is usually to come out of the ccv scheme during your qualifying period for smp (I think it's a set 6 week period?), then rejoin after that. That way your full salary is used for the basis of calculating smp and you'll still get your ccvs while you're on leave.
While there has been one piece of case law regarding deduction of ccvs from smp, lots of employers haven't updated their policies to reflect that yet.
Just one other thing to be careful of though - my employer only allowed one change per year - so if you came out of the scheme, you couldn't rejoin it for 12 months.
You really need to check the wording of the policy and how its run by your particular employer as soon as you are pregnant (I think the qualifying period starts relatively early) and if you're paid monthly you need to make sure your employer has enough notice to take you out of the scheme so that you're getting a full month's pay at the beginning of the qualifying period.
Does anyone know at which point (during pregnancy I suppose, or prior to going on mat leave) you should come oiut of the scheme in order for your 'full' salary to be used to calculate mat pay? i.d. how many weeks do they take into account for mat pay?
Is it 15 weeks?
You don't have to come out of the scheme, just reduce payments.
It's normally the 8 weeks up to the end of your qualifying week. Your qualifying week is 15 weeks before your EDD. It's bloody complicated!
The qualifying week is the 15th week before the week that your baby is due (so roughly 24 weeks).
Your employer has to use at least 8 weeks before that as the period over which they calculate your earnings - so from around 16 weeks-24 weeks.
Those are only rough workings and obviously depends on how you're paid (probably monthly?) and how the pay dates fall.
I think if you are coming out of the scheme / changing payments, you need to be thinking of informing HR maybe as early as 11/12/13 weeks ??
This is complicated! So they use the 8 weeks before the 15 weeks before your EDD? So if the 15 weeks before EDD is your 24th week of pregnancy (for example) then you need to come out of the scheme/reduce payments by the time you are 16 weeks pregnant?
Does anyone know what happens if baby comes early? So your 15 weeks isn't 15 weeks but 10? Does it matter?
Crayfish - the crucial dates are the paydates so say you get paid on 1st of the month, and the 16th week is say the week commencing 23rd of June, then arguably you need to be out before 1st as your employer is unlikely to be able to amend monthly pay. You need to check your dates.
No, as far as I know, the actual delivery date is immaterial because it is based on your expected delivery date. The maternity pay calculation will have been done way before you deliver, even if you deliver early.
Just wanted to say that I'm NHS and have had two mat leaves with childcare vouchers. I remained in the scheme throughout.
When on OMP and SMP the childcare vouchers were not taking out of my wage and the trust continued to pay them throughout the full 12 months. I did get less mat pay as my pay was calculated minus the 243 but they didn't take the vouchers out of my mat pay (I've just checked wage slips).
I know they can take money from your KIT days but from my experience your wage sounds wrong (I can't imagine there beingmuch difference from trust to trust).
Just thought about it more and it definitely cannot be right that they are taking out of OMP and SMP. Your OMP is calculated from your lower pay during the qualifying weeks, they then shouldn't take a further 243 out of your lower calculated OMP, it doesn't make sense. Keep on chasing with payroll and HR and I would definitely speak to union. I'm a band 6 working no unsociable hours and my pay for the first 6 months of mat leave was roughly the same as when working (initially higher but then about 100 less towards the end).
And I have recent experience as on mat leave now! Had two lots back to back!
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