Stopping chidcare vouchers to ensure full mat pay - anybody any experience of this?

[Icoulddoitbetter]

Will put this in chat or employment aswell to get more traffic.

I'm coming up to 16 weeks pg. I need to check the full details but my employer cc voucher policy recommends that you leave the scheme whilst pg as your mat pay is worked out on your salary between week 17 and ? 26 (ish) so it'll come out lower if vouchers are coming out.

My vouchers are a salary sacrifice type scheme. I looked at the inland revenue info last night. That talks about how you pay less NI under this scheme so it will affect the way your mat pay is worked out.

I'm not sure how to work out which way I'll be better off. If I stop my cc vouchers then I pay more for childcare, not sure if this outweighs the benefit of getting more mat pay. Anypne know how I work this out?

My mat pay scheme is 8 weeks full pay, 18 weeks half pay plus SMP, then SMP to 9 months. I earn about £19000.

Confused!

I don't know the answer, but my employer continues to pay the childcare vouchers while I'm on mat leave - if yours does the same then you might be better off sticking with the voucher scheme otherwise you'll end up paying for for childcare anyway. No idea how to work it out tho, it's all so complicated .

Businesses often encourage you to leave the scheme as they have to keep paying you the vouchers. I had 6 months full pay and got vouchers as normal then for the 3 months I've been on smp they have continued to pay me my vouchers. They are considered a benefit that you are not allowed to lose like a company car. Oh and I expect it is highly unlikely that your mat pay is worked out on your post sacrifice salary. Make sure you check carefully and speak to HR if you have them.

Hi Icoulddoitbetter

I run the payroll for my company. What happens with ccv's is that portion of your salary has been sacrificed into a voucher. Therefore its not classed as earnings for NI.

To calculate SMP you look at a person's earnings for NI during the earnings period. So had you have been paid the money instead of the vouchers, your payroll dept would include it in the calculation. As you have had the vouchers they wouldnt.

The best advice I can give you is ask them, as you soon will be entering your earnings period which is used to calculate your average weekly earnings. They should be able to calculate it for you so you can make the decision thats right for you.

Hope this helps

If you were on the scheme before this tax year started, then you will lose some of the tax advantage if you drop out and back in. Tax rules were changed but those already on the scheme were not affected.

I personally would not do it, but I'm not in a tight financial situation either.

I have decided to carry on salary sacrificing my childcare whilst I am on mat leave and letting it build up in my account (cancelling the voucher to my CM, who I will only be using one day a week instead of 3) so that I can use it when I go back to work. I had a long chat with payroll (I work in the NHS) who advised that it was more tax saving to do this, rather than have the money in my hand (but taxed) during maternity leave. The other reason for doing it is that the voucher system is changing and I would not be able to re-enter it on the same terms. Also, I thought that mat pay was calculated on your pre-tax pay so should include the voucher amount?

Hope that helps.

Thanks for the replies,

I just checked and the scheme only changes in April 2011 for higher rate tax payers which I'm not. Nicky thanks, I found something about that on the internet so now it makes a little more sense to me dropping out.

I'm still confused though, as it was suggested on another thread that I can't rejoin that quickly........