Pregnancy and childcare vouchers

[Familyguyfan]

Hi all, just a quick query I have after reading another thread (I know it's bad form, a thread about a thread, but it isn't really).

Currently I claim childcare vouchers for my DD's nursery costs. I thought that my qualifying pay period was based on my gross pay before any deductions (childcare vouchers, pension payments etc.)

However, it was suggested on another thread that the poster might cancel her vouchers for the qualifying period to maximise her income. I can do this, but it seems odd to me. However, I know very little about it, so thought I would ask the experts. Can you advise please?

The suggestion comes into play if you have sacrificed some of your salary in order to get the childcare vouchers. The advantage of this approach is that you only pay tax on your reduced salary and you are not taxed on the childcare vouchers. The vouchers are not a deduction from your salary. You have (semi-)permanently given up part of your salary. Your pay for the qualifying period is therefore based on the reduced salary. If you leave the salary sacrifice scheme your pay goes up and therefore you get higher benefits. That may not be viable, however, as there are usually restrictions on when you can leave a salary sacrifice scheme.

Check the details of your employer's specific scheme for enhanced Mat pay. Some do not reduce your pay on the basis of the CC vouchers (but many do).

I can't answer your question specifically, but I do know that when I was on maternity leave and got to the point where my pay would have gone to nothing, because of the kind of benefit they are I still got the child care vouchers, so got £243 paid every month that I would otherwise have lost. This made a huge difference financially. Hope this makes sense, and am essentially saying be careful not to cancel them.