child care vouchers - pension issues?

[daisymo]

I've just gone back to work and was considering getting child care vouchers through the salary sacrifice scheme. The woman at the nursery said other people have found they aren't such a good idea as they affect your pension. I'm a teacher so thought my pension will be based on my final salary anyway?? Can someone clear this up for me? Please!

ooh? watching with interest... we are teachers too.

I'll ask our Pensions Manager about this at work tomorrow. I'm just about to enter the scheme so will want to know the answer to this in any case. I'm in the Local Govt Pension Scheme and you might want to contact the administrator of the teachers pension scheme on this.

Thanks. I wasn't really sure who to contact, will dig my folder out. The booklet they give you doesn't even hint at any problems. Unsurprisingly I suppose. No-one else at my school has joined the scheme yet.

If you have a final salary scheme and pay plenty of national insurance it shouldn't affect your pension, no

Thanks for clearing that up! I've been wondering exactly the same & am a teacher too.

From NHS guidance:

If I join Busy Bees will it affect my NHS pension?

The NHS Pensions Agency has confirmed that the value of childcare vouchers cannot count as pensionable pay. This means that you will not pay pension contributions on the value of childcare vouchers you receive as part of your salary.

NHS Pension Scheme benefits are based on pensionable pay, therefore should any benefits (e.g. Ill Health Retirement, Early Retirement, or Death Benefits) become payable whilst you are participating in the scheme, or within a year of leaving the scheme, they will be reduced.

Providing you ensure that you are not receiving Childcare Vouchers for three years before retiring or leaving the NHS your overall pension will not be affected.

For further information please contact your Pension Advisor on 01284 829593
What happens if I am an employee and I expect to have some maternity leave?

Statutory Maternity Pay (SMP) is calculated on the amount of average weekly earnings during the 8 week period, fifteen weeks prior to the expected date of confinement. A ?salary sacrifice? arrangement will reduce the amount of salary that is liable to National Insurance contributions. Therefore any ?salary sacrifice? entered into during this 8-week period will reduce entitlement to SMP.

If you are receiving SMP and maternity pay you should contact the HR & Communications department to find out whether you are receiving sufficient income to enter into a ?salary sacrifice? arrangement and receive childcare vouchers after taking into account your other financial commitments which are deducted at source whilst on maternity leave.

I thought the unions sorted all this out . I'm a teacher too, and teachers received these vouchers later than everyone else as the unions had objctions to things like this.....

I know I am being stupid but I can't work out what I actually have to do to get these vouchers!! I've looked on the BusyBees site but cannot find the form I presume I have to fill out. And now my head is hurting!!!! Please help!

Thanks Jura! It was driving me insane & I had planned to phone them in the morning.

When I was working in industry the childcare vouchers were IN ADDITION to the standard pay. And as such did not ocunt towards my pension.Which I thought was fine, as I am not one to look a gift horse in the mouth.

However, if you would be losing some salary in exchange, presumably to save on tax, the OP is right and this might not work out such a good deal.

You might assume that by the time you come to leave your children will be older and yourr pay will be back to normal in the last three years, but anything might happen, say you have more children and decide not to go back afterwards, or get made redundant, decide to change career, have to retire for ill-health etc.

So it is not such an easy decision as it may appear.

daisymo, it does depend on your employer and on the pension scheme. I'm in the LGPS and if I get childcare vouchers, probably will, it won't affect my pension. It does affect stat sick and maternity pay but I still need to find out whether it would affect the employer's maternity pay scheme as I hope to ttc again soon (would like to be able to leave it longer but I'm a rather old first time mum). I think though the teachers' pension scheme has taken a different view.

I don't know what your dp/dh does but it might be worth seeing whether his employer offers childcare vouchers too, as both parents can get them.

Would like to know what all of the posters on this thread decide and how they find it, in case I'm still dithering then!

I assumed that I would be long past needing childcare payments when I hit final salary stage (in the NHS) and that therefore the salary sacrifice involved was not a bother for me.

thanks for info and further comments everyone. elkiedee we're both teachers, but he obviously wouldn't be taking any subsequent mat leave which I might, so it might be better for him to get them not me ... This is prob the most crucial point to me ... don't want mat pay any lower if have another!

chocolate shoes - Our council's are just called childcare vouchers and they sent a booklet with the mat leave confirmation letter.

I don't know why I didn't think before but will look on teachers pension site, couldn't find anything on union site or the teachernet (gov site)

am still dithering too. It doesn't seem very straightforward. My council certainly didn't send any info. I don't know if my school uses them for any other staff. Will have to go and find everything out next week.

I would speak to your union rep daisymoo, or ring HQ, they will know. I know there was a big issue about this just before I returned to work after mat leave. It had all just onlybeens sorted then (about a year ago), although everyone else had had them for longer, but the teaching unions raised objections about some of it at the time.

Also, both you and your dp/dh can get them, it saves you even more, then. It saves us 1/3 of our bills

...onlybeens . What are they.........?

We haven't actually got a union rep at school at present for my union, they've recently retired and noone taken place yet. The school office manager didn't know anything as noone has used them yet. Haven't had time to look on tps website yet, but will e-mail ATL if I don't get anywhere on websites. How would it save more if we both got them? Probably a daft question ...

Can't remember to be honest (tired )

I think you can claim up to £250 per month for one person, so both can claim up to £500 between you. It is definitely worth more, even the government advise it.
Almost sure that is what it is, but I think there is another benefit as well...not much help am I?

Can't you phone your union hq?

It saves you more if you both get them because there is a maximum amount of £243 a month per person and most people's childcare is considerably more than that. If you can save £70 (and that may not be the right figure) and dh can also save £70 that's £140, whereas one person can only claim up to maximum amount so can only save, in this example, £70.

If one of you is a higher rate taxpayer and the other is basic rate, the higher rate taxpayer will also save more.

oh I see, she's only in childcare 3 days, costing about £90 and amazingly they don't charge school holidays (hoorah), so will probably be enough if just one of us claim. I thought there'd been a reason was only thinking of me doing it, had just forgotten why!

Thats how much I pay. It still makes £80 per difference per person. Tha's £160 per month.

Dp with his degree in Maths is sat here dictating this, as I am too dim to understand it

finally found it on the tps website ... it sounds as though when it's a 'salary sacrifice' as offered in some jobs your pension is not affected. The teachers pension scheme don't allow that, so your pay is reduced and they take contributions based on the reduced pay. All sounds like jargon, but must mean the terms 'salary sacrifice' is beneficial as not meaning a reduced salary, although it obviously would be. Hmmm. Will still speak to union/tps Monday to clarify!

daisymo, if that's £90 a week then the limit is £55 - you can get less than the maximum amount. Though I take the term time point - it's a different situation from dp and me.

fizbuzz (and Dp!) If I'm only paying the £90 per week for term time, about 40 weeks a year, I'd still get the £70 vouchers for every week wouldn't I??