How can childcare vouchers be fair?

[jvet]

Why is it that my husband, who works for a largeish company, can claim a voucher for childcare, when I cant working for a smaller local business? My employer cant afford to run the voucher scheme as he cant afford to pay vouchers for women on maternity leave (and he employs 8 women, 5 of child-bearing age) when they aren't earning income for the business. Fair enough. But why does the government only give a tax credit this way to those just above the working tax credits threshold? Why penalise me for busting a gut working for a smaller company when these are the lifeblood of the economy (and where large company perks are mostly absent)? SURELY the government can stop discriminating against women employed by smaller companies and give them a different kind of tax break e.g. at source, for childcare? My unemployed, unmarried step-daughter (mother of one) living on benefits gets far more tax encouragement in returning to work. Why should I bother?

I'm confused.

Does your Husband claim the vouchers or not?

I don't get the thing about the tax credits for childcare though, am I being dense?

Some information for your employer - here

I don't understand why it would cost your employer money???

How can it cost your employer ?? I was under the impression they saved money as well as you ??

I am confused also, I get childcare vouchers (for now.....) and the money comes from my pay-packet, it doesn't cost my employer anything, I don't think. So why would it be costing him more than normakl maternity pay when they were off?[confused
If its about the maternity leave thing why doesn't everyone agree that they will opt out of the scheme whilst on maternity pay if you all want the benefits of a scheme? I opted out as I was not really paying childcare for my older DD, since I was at home and looking after her, so I didn't need the vouchers but I DID need the money instead!

I'm SO baffled why this is discrimination against women though...

I think a lot of firms are put off vouchers by the fact that if you are claiming them, then go on maternity leave, the company cannot withdraw them and they cannot come off smp, so they have to cover the cost themselves.

My company wasn't happy when I told them about this loophole.

that's a good point chocolateyclur... I'd forgot about that loophole.

Your OP doesn't make sense. My DH works for a large nationwide private sector employer and does not get cc vouchers. What difference does it make whether a company is large or small and what has the Govt got to do with it?

As it has to be administered through a 'voucher company' (ours is 'Care') I assume it costs the company to have them administer it, but I have no idea how much.

according to this document the cost to employer is the time it takes to administer it internally, or 1.5-8% of the total value of vouchers paid to employees but savings made on NI they make would pay for that fee

I would say is a bit cheeky of small companies not to set it up

if anything maybe we need a campaign to make this visible
as they don't have to do it - they won't

maybe our government should just change one word from may to must??

Oh Choc - didn't know that, that does put a different spin on it!

I am a partner in a small business, offering vouchers saves us loads on NI so makes it cheaper. You have to offer same vouvhers when on mat leave as during qualifying period but as most people cancel vouchers during qualifying period to ensure max pay for the 6 weeks at 90% bit of SMP it doesn't really matter.

Yes if an employee receives vouchers the employer has to continue paying them throughout maternity leave, even though deductions cannot be made from SMP. This has a disproportionately negative impact on small businesses who usually can't afford to offer more than SMP.

It's almost definitely a false economy for employees to cancel them before qualifying period for SMP to increase their SMP a bit, as up to a year's essentially free vouchers will be worth much much more unless they are only planning to take very short maternity leave.

Bollocks! I cancelled mine, had no idea!

ChippingIn

You don't have to use a voucher company.

Small employers can and do run their own scheme using vouchers they print themselves providing they comply with all the HMRC regulations it's still valid.

Big employers outsource it as obviously it requires time to administer and there is a risk of voucher fraud if things are a but impersonal as they are with a larger employer so having special vouchers with anti-fraud measures built in is of benefit.

Yes, for historical reasons we are now in a situation that is unfair in a number of ways.

The European Court decision that means employers lose out if they have an employee on maternity leave receiving vouchers is the same one that gets you paid holiday at the end of your ML before you return to work, (as well as keeping any other benefits) so be careful what you wish for.

Hang on, I set up a company in London and sorted out the childcare vouchers, it didn't cost us anything.

I think we used sodexho?

It was easy peasy.

The issue is that smaller companies dont want to/cant afford to pay childcare vouchers whilst employees are on Mat Leave numbers 2+. There is no mechanism to ensure/allow employees to 'opt out' whilst they're not earning so a company either completely subscribes to the deal or does not. It discriminates against women 'cos overall more women work for smaller companies or part-time where they're not eligible to claim. If you can claim it, the tax rebate on childcare vouchers is really helpful even though it only applies to the basic rate now. Overall, this system does NOT give everyone FAIR access to a childcare tax break. Is this what Cameron had in mind when he started mentioning 'fair'??

BTW my husband does claim his full voucher allowance which reduces overall childcare costs by 10% approx. I want my older daughter to continue at nursery whilst I'm on Mat leave #2 firstly to retain her place prior to my return to work and secondly to give her continuity with friends and me time with NB/retain sanity. So I will be funding this myself.

Forget the cost of administering the scheme, the issue is HMRC guidance is unclear - that if a woman goes on maternity leave whilst claiming CCV, and is in receipt of SMP or at nil pay - the employer has to meet the cost of the CCV deduction. So effectively the employer is paying for childcare! (Allegedly). This was the fear when the new legislation was introduced, which resulted in a lot of employers stopping their schemes.

It's not just a fear, and the position since 5 October 2008 is quite clear - an employer must continue to provide all non-cash benefits during statutory maternity leave (both OML and AML, and also adoption leave, paternity leave etc...)

And that's why it's not fair! Why should a woman on mat leave get her childcare paid for by their employer!

You could argue the same for gym membership/health insurance/other perks but if an employee benefits from such things then they cannot be withdrawn during mat leave.

I think most people cancel their childcare contributions anyway while on mat leave. I'll certainly be reducing mine.

I work somewhere that has an excellent maternity package (along with other good benefits) - possibly one of the best you can get.. I think this, along with the general attitude of the company, is the reason that there is such low turnover of staff - the vast majority of women return after maternity leave and stay with the company for years (often decades) after having children.

So that's why.

We pay a returners bonus - extra 3 months pay during the 1st year after return. It's excessive to have to fund both.