I feel I'm being penalised for having a promotion

[everdene]

I'm 18 weeks pregnant and was given a pay rise the day I found out I was pregnant. It's my first baby and I earn £36k in London. I'm mid-30s.

My job title has gone from manager to senior manager with a pay rise of £3k and lots of extra work/responsibility.

I found out today I've been moved onto a new work benefit band. On the band below I get £243 of childcare vouchers paid for by the company, but on the new band I get free healthcare (in the U.K. and it doesn't cover maternity). So the benefit I'm now not entitled to would have been £3k worth of childcare vouchers.

I briefly mentioned it to my director who was surprised. But actually I'm really annoyed that I'm basically back to where I started and I will be earning the same as before my promotion. I worked really, really hard to get it.

What should I do? Anyone been in a similar position?

I should add, the private insurance is taxable each year so I'll end up about £50 worse off year on year when I return.

Hopeful bump

CCV come out of salary so shouldn't be grade dependent.

I'm a bit confused.

However, can you opt for CCV instead of PHI?

Is it do with the phasing out of CCV? IIRC people who already get them can keep them, but new parents are eligible for a different type of help instead.

Normally childcare vouchers come of your salary before tax and national insurance is taken off so that you save the tax and nat. ins you would have paid on £243.
Are you saying the company were prepared to pay an additional £243 on you salary because that would be unusual.
Legally, once you are a higher rate tax payer the amount of vouchers you can get is lower.

On the band below I get £243 of childcare vouchers paid for by the company,

Are you sure about this? Childcare voucher schemes are via salary sacrifice meaning the employee gets the £243 deducted from their salary before tax and NI is paid. This means they don't pay tax on the £243 of income. Are you sure you have understood the scheme properly?

Sorry, pressed too soon

Have you been put onto a new contract with your promotion? (We often get changes to our T&C when we are promoted, it's a way of gently shuffling everyone onto the new arrangements) Or is it just that you wouldn't have been entitled to CCV anyway but that has only just been made clear through your new paperwork?

As everyone else says the c/c vouchers are salary sacrifice. It's a tax thing. Once you earn over a certain amount (about higher rate tax) then you can only get 100-and-something as salary sacrifice.

If you want you can get the full £243 by paying lots into your pension to put you back below the amount. (Dh does this.)

I'm confused too Yonic!

Casmama as I understand it the company paid it as a benefit, i agree it sounds bizarre though. I'm not a higher tax payer as I don't get £43,000 or above (I think that is the threshold) but many senior managers in my company would.

It's worth contacting your payroll department and asking for some clarification. I've never heard of companies paying the £243 as a benefit but maybe some do.

I think you are confused! Checking your payslip would answer this question

If it's your first baby you were not claiming vouchers before? And perhaps mis understood the scheme / had it mis_explained? I think you need to chat to your line / manager or hr.

It won't at this stage QL as op can't get the vouchers yet.

Also the phi may be taxable but it is a benefit. I'm sure you csn opt out if you want but it's cheaper than paying your own.

I'm wondering if a combination of me not knowing the system (first baby) and the HR person only starting last week so not understanding it either is leading to this mess!
I'll go and clarify the situation!

Ok I checked today and it very clearly states the company pays the childcare vouchers on the lower benefits band. So I'll be missing out on 3 grand a year in ccvs.

I've asked if I can forgo private healthcare to get the childcare vouchers... fingers crossed!

So parents at that grade effectively get higher pay than non parents?

My company also regards it as a benefit. Which was extremely handy for them as they could stop paying it when I went off on my second maternity leave.

You should continue getting benefits eg PHI when on maternity leave, shouldn't you?

Surely stopping company benefits whilst on mat leave is sexual discrimination?

That's not how CCV work
You sacrifice £243 of your monthly salary to your childcare account.
You do not pay tax on this.
You then pay your childcare provider from this account.
The £243 comes from your normal earnings, it's not an additional benefit; the benefit is that you don't pay tax on it.

it very clearly states the company pays the childcare vouchers on the lower benefits band.

I can't see how this is possible. As yonic says, it would mean non parents were getting less than non parents.

The company pays the CCV contribution directly to the CCV provider, because the employee has sacrificed this amount from their salary.

I.e. If the employee's gross salary is £1243/month and they chose to join the CCV salary sacrifice scheme, then their monthly salary is £1000 (taxable) and the employer pays £243 into the employee's CCV account.

Yes that is my understanding of it too bike

So non parents on the same salary would get £1243 in their pay and be taxed on everything above the tax threshold.

Parents in the CCV scheme would get £1000 in their pay and get taxed on everything above the tax threshold. So they will pay less tax on their earnings than anyone not in the scheme.

What bike said