What do you do about nanny pensions and statutory sick pay

[MGMidget]

I used to employ a nanny a few years ago and I am now considering getting one again. Times have changed and I know that now nanny employers must cover statutory sick pay and that pensions are gradually being introduced for nannies (soon to be compulsory). Therefore, I wanted to find out how complicated this is to organise for nanny employers? Are there special pensions schemes that a domestic employer can enrol their nanny into and is there advice available from anywhere? Also, are there insurance schemes available to cover the risk of having to pay statutory sick pay long term? Thank you!

Most of the nanny payroll companies will take on a lot of the admin for you if you want them to. For example, the one I use (PAYEforNannies) will do all the actual paperwork of setting up the pension scheme for £65 a year (then you just have to pay into the scheme - but they tell you how much). Alternatively you can pay them more and they actually debit your account and pay the nanny and the pension scheme on your behalf (but that is significantly more expensive - £48/month if you want them to do all of the payroll and pensions payments for you): www.payefornannies.co.uk/pensions/

I've always just paid my nannies in full for sick days, as neither has taken very many, but I'm sure they would also do any admin related to SSP if I needed it as part of the standard payroll service (£138 per year). I'm afraid I don't know about insurance.

I'm sure the other nanny payroll companies would offer similar services. Alternatively you could set up the pension yourself with NEST and do your own payroll, but for me it's worth getting somebody else to do that for me so I know it's all being done correctly and I'm not having to keep up to date with all the changes.

NannyPaye charges £60 to administer the pension scheme. Most employers use NEST but there are other pension providers though do look at the fees involved. The date from which you will need to provide a pension scheme is determined from when you first became an employer, you can check using the pensions regulator website.

Agree a gross salary. Currently employer contribution for pension is 1%. You can reduce cost by doing 1% of earnings above a certain amount, known as qualifying earnings.

Not aware of insurance cover for employers whose employee goes on long term sick. I expect someone must offer it but it may be quite costly. From your past experience did you find that your nanny was sick quite a lot, or that it was rare?

Thanks Lightripper, very helpful. Also grateful for more info from other posters too to help with this decision!

My past experience with nannies has been less smooth. I've had issues arising with sickness (hence thinking about the risks of long term sickness and whether there are insurance policies available to cover this).

Also, had a less than smooth experience with nannytax in the past who messed up my payroll admin by changing the HMRC reference half way through a tax year without telling me and causing a big headache. Therefore, very interested to hear about solutions that don't rely on a nanny payroll company handling too much.

Thanks Cindy34 too. Yes, had a few issues with sickness which is why its on my mind.

Will have a look at the pensions regulator website. I'm not anticipating getting a nanny until August/Sept 2017 so I think pensions are becoming compulsory for everyone shortly after that anyway so hence I won't have a long period to think about what to do once I become an employer again.

Not much help about the pension as still getting my head around it. But I'm a nanny and my employers just paid me in full for my sick days (I took 2.5 days off last year) I was happy to come back in but they said for me to rest. I'm rarely ill though. Think those were my first sick days in my entire work life!

Hi. I think pensions will only be payable for those earning above a certain level, maybe £150ish a week upwards? I think wages determine whether you need to pay sick pay. I pay one nanny £120ish a week and dont need to pay ssp or a pension

Yes, for auto-enrolment pension there is an eligibility requirement of £10,000 gross earnings. However I don't think that requirement exists for voluntary pension, though not sure many people earning under £10k would be wanting to put money in to a pension scheme.
www.moneyadviceservice.org.uk/en/articles/automatic-enrolment-if-you-earn-up-to-gbp9440

Thank you everyone, very helpful.

Payefornannies are fab and cost half what nannytax do. I stopped having a nanny a couple of months after my subscription with them ended and they extended it for free. They dealt with sick pay, annualised hours and odd tax codes with no problems at all.