Salary sacrifice car and maternity pay

[Flymeaway4]

Hi

I have a salary sacrifice electric car. I pay for it through my monthly pay before tax and this was active over weeks 18-25 of pregnancy (ie. The weeks my stat mat pay is based on). It is listed on my payslip as a negative amount under the payments section, as opposed to being listed as a deduction. Does this mean it will reduce how much stat mat pay I get in the first 6 weeks?

ask your employers how it will work. Will they suspend car payments while you are on stat mat leave or do the payments continue? Will you still have use of the car on mat leave?

I don’t trust them to get it right, to be honest! Yes, will keep car, payments will pause if it would put me below min wage, which I don’t think it will.

this says that SMP cannot be sacrificed and must be paid in full.
"If an employee has entered into a salary sacrifice their AWE is calculated using the amount of earnings actually paid to them during the relevant period. SMP cannot be sacrificed, it must be paid in full."

https://www.gov.uk/guidance/statutory-maternity-pay-employee-circumstances-that-affect-payment

Ok, so my car payments should stop during SMP (that just means I’ll have extra payments to make after I hand the car back though)

I’m still not clear if my car payments now will affect my AWE for those first 6 weeks SMP though, or if it’ll be discounted from the calculation. I feel like it should be discounted, otherwise I’m effectively paying for the car twice, but maybe not?!

We paid our workplace nursery fees as salary sacrifice. When I was on SMP I received the full amount of SMP and work covered the nursery fees.

sorry, that's the limit of my knowledge. Are you a member of a union or professional organisation? They might be able to give you more detail.

They don’t make it very clear, do they!

I am, yes, I’ll try there. Thank you

I suspect, although not sure, that companies can choose to do stuff like that or not....that they can give you a better deal than the rules state but not a worse one.

Your maternity pay will be affected as it is based on NI able earnings. Ie your salary after the salary sacrifice

Yeah, this is my understanding. So it will be reduced.

You will also still have to make the payments while off (in most jobs, it would be employer discretion to do otherwise), or you can hand the car back.

I could be wrong but I think that the repayments have to still be counted even if you aren't making them during maternity leave because you are still employed and otherwise it would be sex discrimination. Not sure where the money magically comes from but it should be in the car hure/purchase policy somewhere.

No being able to get a straight answer to this question when I asked was one of the reasons I didn't do the car scheme at work. No one seemed to know - not work, not the company running the scheme. My assumption would be I'd have to hand the car back if I went on mat leave and no one could tell me otherwise.

Perhaps they'll let you pay to keep the car for the months you're off. If the payment isn't coming from salary sacrifice, the monthly payment will be much larger is real terms, presumably (because you'd be paying it out of a partner's post-tax cash or already taxed savings).

Have you checked the contract to see if there's a clause that mentions sickness, furlough, mat leave etc?

Sorry I can't be of more help - I really don't think enough thought goes into policy around maternity leave, full-stop.

Wow, glad I’m not the only one confused! I’m not bothered about paying for the car over mat leave, I can afford that. I’m just a bit irked that for the first 6 weeks of mat leave I may be paying for it twice, as my AWE are lower because of it now. It doesn’t quite seem right to me

There is a specific insurance on my scheme at work built into the price which means that company can reclaim cost of car as long as you are not pregnant already when you order it so you keep the car, company pays premiums and then reclaims the cost.
A variation of this was available with all the providers we looked at but it is optional for the company to decide whether they want to have this additional protection of not.