Childcare vouchers

[MsFrazzles]

I hope this is the right place to post. I've got a 4-month old baby and am planning on going back to work in January when he'll be a year old.

According to the online calculators we will be better off with the current Childcare Vouchers scheme than the new Tax-Free Childcare system coming in this Autumn. Am I right in thinking we can sign up now and start getting the vouchers (both me on mat leave and my husband who works full-time) and save them for when we start paying for nursery in Jan?

How do the vouchers work? Apparently the company my work uses is Edenred. Do we get physical vouchers? I've tried to read up online but it's all a bit confusing.

Your DH can start getting them now to save for January but your employer will not be likely to accept you into their scheme while you are on ML unless you are on very generous maternity pay higher than SMP - vouchers are by salary sacrifice but they cannot pay you less than SMP so while you are on SMP they would be paying your vouchers from their own funds which most employers would object to - for second and subsequent children you can get vouchers while on SMP because employers have to keep all non-salary benefits going throughout your leave.

With most suppliers you can choose to either get physical paper vouchers, get the money transferred direct to a childcare provider each month or get put into an online account from which you can make ad hoc electronic payments, but it depends on the company.

What calculator did you use? Trying to work out what would be best

Hi Toomany, I used this calculator:
www.kiddivouchers.com/tax-free-childcare-savings-calculator.php

Thanks Fish, that's helpful. I only get SMP so I can't see my (small and stingy) employer stumping up for vouchers while I'm on ML but I'll check.

Our childcare costs will be around £550 pm from Jan and I understand the max salary sacrifice is £243 per month (each). So if we both did the max, we'd end up with more vouchers than we could spend, correct? So do we need to make sure the amount we are paying in roughly equals the cost of our childcare? Gosh, I feel really stupid - I'm usually good with finances but baby brain is taking its toll!

Your employer has a legal obligation to provide you with them when you're on maternity leave. The amount of OMP you have is a moot point as minimum wage does not apply on maternity leave. Your OMP can be reduced to reflect the salary sacrifice (ie be based on the reduced salary) but it is not simply a case of deducting from this.

Many employers used to think it was just if you were already getting CCVs that this applies, and as there has been no test case there is no definitive answer, however the sex discrimination act (which is where it comes from) says you are entitled to the same terms and conditions of employment (apart from cash pay) that would have applied were you not absent. The right to reduce your salary and get a benefit of childcare vouchers is part of your terms and conditions when your employer offers the scheme - so it is the right to get Childcrae vouchers that counts not just the right to continue getting them if you are already. As I said no case law but this is the interpretation of most legal advisors.

You can save up vouchers and use til your child is 15 so don't just think of your immediate childcare costs. If you will be spending £550 and getting £486 a month there is £64 a month excess which you will use the balance for - it'll go quickly. You don't have to use them the month you get them

Her employer does have an obligation to pay them whilst on mat leave but only if she was a member before going off on maternity leave, they have no obligation to let her join the scheme now whilst on maternity leave.

AS I said above it's not that cut and dried. Some employment lawyers would say you have to already be on the scheme whereas some would say there is an obligation as soon as the baby is born.

IT's not really anything to do with HMRC but they say you should not stop anyone from joining your scheme if they are on maternity leave in the E18 (it's part of the condition for tax exemption that the scheme is available to all staff).

Tribunals have ruled both ways it there's no actual case law. I would always advise employers to provide them. Advising employees is more difficult as there are obviously implications to asking your employer in terms of relationship