Childcare vouchers - BE AWARE

[jaabaar]

Hi,

Just wanted to make sure that all are aware of the follwoing fact.

You can claim childcare vouchers from the day your child is born! Through your wages, or your husbands or both. You dont have to wait till you use a nursery/childminder etc.

Note though that they are usually valid for only one year.

We have saved 840 pounds by starting early. Moreover you have some money saved up for when you need to pay the very expensive nurseries :)))

Also, you can keep claiming them whilst you are on maternity leave - with your second or subsequent child obviously! I am not sure of the full details but even when you are on SMP then employers still have to 'pay' the vouchers.

Absolutely right. Most people are not aware of this and only start vouchers once the child is in nursery/childcare.

E-vouchers don't expire only the paper ones.

jaabaar, thanks for pointing this out.

Although worth noting for vouchers if you are pregnant with number 2 (or 3 or 4!) and you have a maternity package that you might want to take a break from vouchers for the few weeks that they caluclate your pay for the purposes of your your maternity pay - that way your maternity pay will be calculated on your actual pay rather than £243 less IYSWIM.

My HR dept was good enough to call me and tell me to do this - I think for weeks 17-21 of my pregnancy IIRC - so my maternity pay was based on my full salary, a friend of mine didn't know and it really made a difference to her maternity pay.

My HR department as well as voucher provider advised me that whilst on SMP I can't claim as my income would be too low and that as vouchers are purchased through salary sacrifice, the employer does not have to continue paying for them.

I've had the same information when I was still with my old employer (tried starting to claim whilst still on leave), but keep reading the advice that you're still entitled in various parenting forums.

Does anyone have a link which substantiates this claim?

WidowWadman: I know that you cant claim if the salary sacrifice takes you to below the minimum wage.

Also worth noting (for higher tax payers) that from 6 April only vouchers will be given to the equivalent of basic tax relief so it is well worth joining your scheme before this date if you can.

www.childcarevouchers.co.uk/News/Pages/Childcare-Voucher-changes.aspx

jabaar - my posting was in response to dysgu

Widow - [[http://www.hmrc.gov.uk/employers/sml-salary-sacrifice.pdf HMRC guidance on maternity leave and salary sacrifice. You will see that employers are not allowed to make salary sacrifice deductions from SMP. Nothing to do with level of income, it's just not permissable to make deductions from SMP.

However your employer is obliged to continue providing non-cash benefits including childcare vouchers throughout maternity leave.

sorry

It's also worth checking how your employer calculates your maternity pay. After much questioning I discovered that mine based it on full pay and adjusted for salary sacrifice so i didn't need to stop the vouchers.

Employers are required to continue benefits like childcare vouchers throughout maternity leave ( otherwise it would be discriminatory) so if you aren't earning enough they must make up the difference.

They, of course, don't advertise this at any point and many people I know have lost out because they have cancelled the salary sacrifice themselves but stand yOur ground people!

Mercedes you don't need to stop the vouchers regardless.

SMP should be calculated on the adjusted salary once salary sacrifice is taken into account. That's not something for an employer to decide, that's the way it is.

If you're receiving childcare vouchers before maternity leave your employer must continue providing them and cannot deduct from SMP. It's not about 'making up the difference' either. They can deduct from any enhanced maternity pay but can't deduct from the SMP element at all.

Flowery, thank you very much. I will take this to the nice lady in HR. I'm working for a quite big organisation, so I'm surprised that they give out incorrect advice - the question must have been asked and/or challenged before.

I've asked the question explicitely last week and have been told that as the vouchers is something which is not administered by them, but an outside provider and that I would "purchase" them with my salary sacrifice, so couldn't once I'm down to SMP.

Also I was told to ask the childcare voucher provider about how to go about it.

It's a really frustrating running from pillar to post, and I had resigned myself to losing entitlement for the part of my ML I'm on SMP. I'm so glad I read this thread.

Hope I'll get somewhere with this (I'm not unionised, and don't really want to cause a stink either.)

I've only just seen this - Thank You for Posting about it. (And - especially the Bit about the 17-21 qualifying weeks. That's something that's easy to Forget about!).

Hit Post too soon. I meant thank you Also beagle101 for pointing out the 17-21 weeks qualifying salary would affect this Too.

Is the basic rate tax level definitely starting in April?

I asked my HR dept about it today and they said that it was still being debated by the Govt.

This article says:

"The changes were stipulated by the EU Equal Treatment Directive and the Pregnant Workers' Directive, and resulted in amendments to the Sex Discrimination Act 1975 and the Maternity and Parental Leave Regulations 1999.

Jane Anderson, solicitor at Matthew Arnold & Baldwin, said: "There is currently uncertainty over whether an employee's entitlement to childcare vouchers should be treated as part of the employee's remuneration or as a non-cash benefit.

The issue is untested in the tribunals and courts, but last year Revenues & Customs published guidance that childcare vouchers are non-cash benefits rather than remuneration, even if they have been provided by way of salary sacrifice.

"If this is correct, the effect is that the value of childcare vouchers should not be included for the purpose of calculating statutory maternity pay (SMP) and the employee is entitled to the childcare vouchers during her maternity leave without sacrificing any SMP. This interpretation is debatable though, as it is supported by the fact the vouchers are non-transferable and cannot be converted to cash."

Claim risk

As for advice to employers worried or confused about where they stand legally on childcare voucher provision, Anderson said: "Advice is not based on legislation or precedent because the situation remains unclear"

Seeing as I in general get quite a generous treatment from my employer, I don't feel like it'd be worth to pick that particular battle.