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Paid childcare

Discuss everything related to paid childcare here, including childminders, nannies, nurseries and au pairs.

Childcare vouchers

7 replies

Sinkingfeeling · 22/12/2010 10:00

We're just about to start using the new after-school club at the dc's school one day a week and want to use childcare vouchers to pay for it. Neither of us are higher-rate tax payers, though dh earns a fair bit more than me. Does it matter which of us opt for the childcare vouchers scheme (both employers offer one)? Does the scheme have any effect on pension contributions? Also, can you 'get back' vouchers if you overpay? Would be very grateful for any help - can't seem to find definitive answers online.

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nannynick · 22/12/2010 10:13

Does it matter which of us opt for the childcare vouchers scheme (both employers offer one)?

No. You could both get them. Only thing you will need to take account of is the amount that you will be paying the after-school club, as the voucher amount needs to be that amount or lower.

It is quite common for first payment to be non-voucher. Then the voucher you get in month 1 is used to pay month 2's invoice. Vouchers can take a while to clear, thus this helps insure that the provider is paid on time. Your use of vouchers does not replace your commitment to pay on time. If the voucher does not clear in time, the provider will expect you to pay immediately.

Does the scheme have any effect on pension contributions?

Yes it can do. How will depend on the pension scheme run by your employer. The voucher is Salary Sacrifice so affects your pay, which thus can affect the employer pension contrition. Your employer will be able to tell you about how if affects your pay and any associated work benefits.

can you 'get back' vouchers if you overpay?

No I don't think so. It's not the same as cash, so the provider can't just give you a refund. The vouchers can be stockpiled for up to a year typically, so if you stopped using a provider you could stock up vouchers to pay the next provider.

Least that's my understanding of things. As you have found already, getting definitive answers is tricky. Best to ask your scheme administrator, plus ask the after-school club about their procedures for accepting vouchers.

mranchovy · 22/12/2010 12:07

I have a slightly different take on this...

Does it matter which of us opt for the childcare vouchers scheme (both employers offer one)?

If there is any chance of you having another child it might make a big difference, but it gets complicated. If your employer would normally pay SMP only for any part of your ML, you might want to take vouchers yourself as due to an unintended consequence of current legislation, most employers continue to provide childcare vouchers during ML and they are not allowed to deduct the sum from SMP. But beware that if they only pay SMP during the first 6 weeks of ML (ie 90% of earnings during the qualifying period) this has an adverse effect - I said it was complicated!

Another factor is the ease of using the vouchers - Computershare have a particularly bad reputation for the quality of their systems so if you can steer away from them, do.

Does the scheme have any effect on pension contributions?

It shouldn't do - it is very easy for your employer to make arrangements so that it doesn't, and most employers have done this. Do check with the employer(s) though.

can you 'get back' vouchers if you overpay?

Do you mean if you get more vouchers than you need so you want to return the vouchers and get paid cash instead, or do you mean if you pay more to the after school club than you use in childcare can they give you a refund?

If it is the first, most schemes allow you to withdraw vouchers and be paid the sum through payroll instead as a one-off but this provision is designed to cater for unforseen and possibly tragic circumstances and should not be relied upon generally. Check with your employer how they operate this policy.

If it is the second, then generally no. The vouchers must be used to pay for childcare by a registered provider so once you have used them to pay for that childcare, you can't get a refund.

LunarSeasonsGreetings · 22/12/2010 12:13

Wish I'd known that a couple of years ago .... mine pay SMP only and used the vouchers to both reduce the amount for the 90% weeks AND as a deduction from SMP.

mranchovy · 22/12/2010 13:00

The law on salary sacrifice benefits during maternity leave changed in 2008 (I think the effective date was 5 October 2008) so if it was 'a couple of years ago'...

Sinkingfeeling · 22/12/2010 21:39

Thank you both - more sense gleaned from MN in two posts than from over an hour of reading childcare websites. No chance of any more dc (too old/knackered/broke). I did mean if we paid in too much to the scheme, could it be withdrawn again in the form of taxable salary. Ticky one because we also use a playscheme in a different school in the holidays, but it's difficult to judge how much salary to sacrifice a month.

OP posts:
Danthe4th · 22/12/2010 23:18

Start the scheme at least a month before you need them so you have a bit stockpiled. The maximum is £243 a month each. If its not used in the month it gets carried over and stays on your account. It can't be withdrawn again as salary.

StarExpat · 23/12/2010 08:36

I use computershare. I saved one month at first and now I'm always one month ahead everything is done by direct debit from my account to my childminder's account and has been perfect every time so far for a year. NO problems. All on time. :)
I didn't have a choice of voucher company, either. Most people don't. You use what your employer provides or not.

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