Leaving childcare voucher scheme to get full mat pay - anyone know how this works / have experience of this?

[Icoulddoitbetter]

Will put this in chat or pregnacy 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!

There is information and a calculator on the direct.gov website to help calculate your mat pay.

Mat pay is calculated on the average salary over a certain no of weeks, the website will tell you exactly when it is. You'll only need to give up your childcare vouchers for a couple of months so given your salary level I think it'll be worth you doing this, but the calculator will help you decide.

I decided to remain in the scheme, because although your pay that your mat pay is based on is less, my employer becomes liable for paying my childcare costs as soon as I go down to SMP and nil pay under our voucher scheme. This worked out as better financially for me - you could check if your scheme is the same?

Remember the vouchers don't expire, so you can stockpile them even if DC1 reduces childcare, and use them when you have 2 to pay for.

If not, then you will almost certainly be better off opting out for weeks 17-26, as the pay your mat pay will be based on will be down by £243/month (if you get the full allowance), whereas you only save £75 ish/month tax on that amount by getting vouchers.

If you stay in the scheme, remember that you will receive childcare vouchers for all of your maternity leave. Employers are not allowed to make deductions from your SMP so they have to meet the cost of the vouchers when you are receiving SMP.

In my case I only received 90% pay for 6 weeks, however after that my company still had to provide the childcare vouchers at £243 - which I then saved up to pay for nursery on my return to work.

Of course most companies don't tell you this. You need to take this benefit in to account when looking at what you'll lose in maternity pay from staying in the scheme.

Just to clarify - childcare vouchers are a non-cash benefit so all employers must continue to pay for then when you go on to SMP.

Mike explained what I was whittering about much better!

Mike thanks but as I just said on my other thread, I don't think this is the case for me. It says in the policy that we must leave the scheme if paying for the vouchers takes you to less than minimum wage, which it would If I was on SMP only. I pay for the vouchers, not my empoyer (the NHS), they just get taken out at source.

But you could opt out of childcare vouchers for the period mat pay is calculated on and then opt back in before you goes on mat leave.

It looks like you get more than SMP for 6 months so childcare vouchers would get taken out of the enhanced mat pay, it would only be for the last 3 months that you are on SMP that your employer would pay for them.

I worked for the NHS and opted out during weeks 17-26 - you know you can't just "opt back in" - you need a reason to do so - returning after mat leave is usually fine. (I haven't actually opted back in)

And they don't come off SMP so the min wage thing isn't an issue there. You get them on top of SMP

I guess it depends on your company/ voucher scheme. We just had to say we had a change in childcare requirements.

Icould - I am NHS too, and you can def stay in and get the vouchers "free" in your SMP & nil pay periods, as long as you did not opt out in your qualifying period. If you opt out in your QP, you won't be able to opt back in for mat leave.

The vouchers are a non-cash benefit provided by your employer. You have sacrificed some of your salary to exchange for a non-cash benefit instead. Your employer is required to provide non-cash benefits including childcare vouchers throughout maternity leave even though it can't continue to make salary sacrifice deductions from SMP.

Money for vouchers can't be deducted from SMP however it can be deducted from any maternity pay you get over and above SMP. So you need to look at how much maternity pay you get, deduct the SMP element from that to see how much you're left with. Vouchers will be deducted from the extra pay you're receiving as you go along. It will probably be possible to deduct the full cost of vouchers while you are on full pay, but possibly not while you are only on half-pay. You will get them free for the last 3 months as there is no money for them to be deducted from.

Then work out how much mat pay you'd get if you come out of the scheme and increase your salary. Deduct childcare from that and see which way you're better off.

Just to add that I work for HSBC (so a large organisation, who are striving to be "the best place to work" and get in the Times top ten etc.) who are seeking legal advice as they are refusing to pay the vouchers for us on SMP. Disgusting really but hopefully we'll get our money back when the government make them.

Not sure if this will help you, but this is the HMRC guidance on salary sacrifice and non-cash benefits. The law also applies to pension contributions made by salary scarifice during the 9 months of ordinary maternity leave.

www.hmrc.gov.uk/employers/sml-salary-sacrifice.pdf

See page 11:

Misunderstanding: employers sometimes believe they have to continue to provide the non-cash benefit during statutory maternity leave in every circumstance.
� Comment: subject to the terms of the contract the employee may be able voluntarily to opt out of receiving the non-cash benefit under the salary sacrifice arrangement. However it is important to emphasise that the employer cannot compel the employee to opt out of receiving the benefit.