SMP/ Childcare Vouchers and holiday pay

[Twiglet4]

Hi there
I have read all the previous posts about employers unable to deduct childcare vouchers from SMP, but I have another query as my employer 'kindly' offered to pay my annual leave accrual each month (2 days full pay) as opposed to me accruing and taking at the end of my maternity leave. I've just received my first payslip with SMP and holiday pay, but they have deducted the childcare vouchers from the holiday pay element. Can they do this?

Also, if I choose to revert back to just accruing leave whilst I'm off on mat leave, do they have to carry over all of my holiday entitlement into following holiday year? My hol year runs until end Dec but I'm not due back at work until March.

Please help!

Yes, they can deduct from anything that is above SMP - that's one of the reasons I didn't do KIT-days. My employer only offered pay, not time off in lieu, so I would have lost any pay for vouchers straight away.

WRT to carry over, it depends on their policy - e.g. my company only allows carryover if pre-approved and taken directly following the maternity leave

Well, they can deduct for childcare vouchers from anything above SMP but they are not allowed to pay you in lieu of your holiday, so they shouldn't be doing that. Holiday is for you to actually take, not just extra pay.

Technically they can follow whatever carry-over rules they have in place for holiday but on the other hand you must be given opportunity to take your holiday, so if they misleading advised you that it was possible to just receive extra pay instead of taking holiday, then they ought to allow you to carry it all over.

Another point - you mention being paid two days a month as you accrue holiday. Basic statutory minimum holiday entitlement for someone working 5 days a week is 28 days, which is a monthly accrual of 2.33 days, so if you work 5 days a week they're not giving you enough anyway.

flowery - is that true? Because I had asked for bank holidays to be tagged on to my maternity leave exactly for that reason (and also because the extra pay played havoc with our tax credit claim) - my manager declined for staffing reasons so I was paid.

Can't reverse that now, obviously, because I can't pay them back, but would be interesting to know whether that policy is incorrect, too/

Not, they cannot deduct your childcare vouchers. They are a salary sacrifice.

The trouble is most employers (including my own) don't operate them correctly.

What should happen is;

Your salary is 15k per year

You want to pay over 1k in childcare vouchers

Your employer should issue a new contract, that states you will be paid 14k per year plus they will pay over your ccv every month. That is why when your employer calculated your average weekly earnings they cannot include your wages before the ccv deductions

When you go on mat leave your employer is required by law to continue to pay over your ccv without deducting them from your salary. It's a benefit, not a salary payment. Think of it like a company car. They cant take that from you during mat leave.

However, that costs employers, so it's cheaper to put the deductions through the payroll, and staff are not informed of their rights.

Below is the link to the HMRC guidence for employers on salary sacrifice during SMP

HMRC SMP

I'm not sure about your holidays, I think you're best speaking to your HR team.

Are you going to speak to your employers?

That's not quite right SuperSlattern, employer's can't deduct from SMP but they can deduct from anything they pay over and above that, which is where the OPs question comes from.

WidowWadman it's complicated. If you only get the statutory holiday entitlement including bank holidays, then your employer is not allowed to pay them out at all.

If you get more than statutory then technically anything over and above could be paid out by mutual agreement. However this shouldn't be during the time you are receiving maternity pay unless it is done as Keeping In Touch days - the 10 days you are allowed to work and be paid during maternity leave without impacting your SMP. Again, that must be by mutual agreement.

What isn't allowed is what the OPs employer is doing, which is just paying out regularly during maternity leave rather than allowing holiday to be accrued and taken, especially when it's only statutory in the first place meaning even paying some of it out isn't allowed.

Thanks everyone, I'll advise them about the holiday ruling and try to get them to reverse the decision. Looks like they offered this to get out of paying the CCv!

thanks for clearing that up

Interesting reading - when I went on mat leave my company paid me any outstanding holiday plus any holiday & bank holidays that I would accrue whilst on mat leave. Seems to me that all companies operate in different ways regardless of how they should be operating.

Another query (I'm steering clear of the debate on the other thread)...

We have a salary sacrifice scheme. My employer continues to pay CCVs during AML in addition to SSP. However the policy is that the value of such vouchers "accrue" and must be repaid to the firm on return to work. Is that allowed and if not how would/should you go about challenging the repayment?

I should just add that the policy does not affect me personally because I receive car cash allowance which also continues to be paid during AML and so my CCV value will simply be deducted from the car cash allowance but it seems unusually mean spirited of my firm who usually like to be generous in matters of discretionary maternity pay and yet in this case they seem to be attempting to circumvent equalities/discrimination legislation.

Sarah I would collate evidence from reliable sources such as HMRC, then speak to your manager and HR dept.

If they still refuse to change you will need to follow your company's greviance procedures.

My expertise is Payroll, hopefully a HR person will be along soon to guide you on further matters

Thanks SS. I probably can't raise a grievance since I am not aggrieved - I think they are within their rights to withhold the vouchers from the car payment. Just disappointed for other people which being people who do not have cars/car cash provided will generally be the support/admin/lower paid staff.