employer wishing to recoup childcare vouchers paid whilst on mat leave

[planetbox]

I wonder if anyone has been in a similar situation that could guide me. I have stayed in the childcare voucher scheme over mat leave, however, being that pay had dropped so low and the employer not being able to sacrifice SMP according to the HMRC guidance, I am now in a sitation returning to work that the company say I have been overpaid CV and that they have the right to recover monies in regard to ovepayment. They state that this would include the value of non-cash benefits recieved during a maternity period.

They say that although HMRC state that it may be discriminatory for a womans pay to be reduced after mat leave, they have not directly assessed our salary sacrifice arrangements and they would not be able to advise as to whether or not it complies with the Equality Act 2010.

It feels like my integrity is in question and that I am trying to dupe them out of money suggesting such schemes / benefits are not 'free of charge'.

Help please , I am feeling really anxious as it is a lot of money and since children I am now on PT wages.

It is for this reason that my firm decided not to offer child care vouchers to anyone.

Might be better in legal, but my understanding is that they must pay for your CV whilst on mat leave and cannot deduct this benefit when receiving SMP. To do so would be direct sex discrimination. As poster above said, it is why some employers don't offer childcare vouchers.

It's clearly against the Equality Act as it is treating someone less favourably by cutting their pay because they took maternity leave. It would also be an unlawful deduction from wages.

I seem to recall that my employer ended up paying me slightly more to top up the stat mat pay towards the end of my leave period in order to cover the voucher deduction.

My understanding is that they have to give you the vouchers on top of your smp whether they like it or not.

Why would you need cc vouchers or childcare when you were at home to care for your children?
Why are employers expected to pay for something you don't need?

Just because you're on maternity leave, it doesn't automatically mean you don't need childcare! Perhaps the op has a child in nursery and can't take them out because they'd lose their place. Or they might want their child to continue going to their nursery or cm for continuity and to ensure that mum and new baby get some quality time together.

Also, you're allowed to bank vouchers to use in the future, so why wouldn't you keep getting them? Like all salary sacrifice benefits, it's an ongoing arrangement.

I continued to receive childcare vouchers while on mat leave. It was my understanding that they cannot deduct this amount from a statutory benefit like SMP. I think in theory they should have advised you to stop the vouchers before going on mat leave so that your entitlement to SMP etc would be calculated on the basis of your full salary rather than your reduced salary. But if they didn't, they cannot take them back. That's what I thought anyway and that's what happened to me.

"Why are employers expected to pay for something you don't need?"

How about "because it's the law"?

Employers have to continue to provide any and all contractual benefits throughout maternity leave, and to do otherwise would be unlawful discrimination.

Many employees may not need their company car during maternity leave either, but that doesn't mean an employer can take it away from them. Perhaps they don't need annual leave to be accrued as they are not at work anyway, but they still get it.

It's not about anyone's opinion as to whether the individual employee needs the benefit, it's about the law saying benefits must continue.

Ah, I see. I didn't know about the law.
Bloody good thing these vouchers, free childcare can't be bad. Of course if that's how it works.

It's not quite how it works

Basically you agree to have your salary reduced by the amount of the voucher (salary sacrifice) the benefit is that you get the voucher amount without tax or national insurance having to be deducted.

Pictures

Didn't have anything like this I don't think, when mine were little.
So pardon me for being ignorant but, you give up some of your salary before tax and NI, which means you are earning less andtherefore pay less tax, thus reducing your tax?
Is that right? If not, I'm being a bit dumd, so ignore.
Where does the childcare element of tax credit come in then? Is this for people who aren't entitled to vouchers?

Child care vouchers are completely separate to tax credits.

But basically yes, that's how it works. It's a bit like how you pay into your pension, it's paid before tax is deducted (except instead of money into a pension pot you get a voucher purchased by your employer that you use to pay your nursery/childminder with)

My firm doesn't offer it.

According to Martin Lewis if you are entitled to child tax credits you are probably better off not getting vouchers

www.moneysavingexpert.com/family/childcare-vouchers

So in simple terms vouchers are for higher paid workers.

polyesterbride that is the bit I don't get. About coming off the vouchers to get more SMP. I am only entitled to SMP. It will be only 6 weeks of 90% and then for 46 weeks I will get vouchers paid for by the company since they can't deduct from the maternity pay and for the last three months 0 day. So surely the amount I get in vouchers are more due to getting them free for 46 weeks vs the 6 weeks of lower 90% pay? Or am I missing something?

And as for not needing it during maternity. Male staff were adviced by my old company's HR to sign up ASAP after a child is born. That's what we did with DH when I went on my first maternity leave. We store up an entire year worth of vouchers. They get used in no time anyway nice I return to work. Nursery is £1k a month! This time round, I'm keeping DD in for 3 days a week, at least that's my plan. Most mums I know keep their older ones in private nurseries in subsequent maternity leaves.

As for companies not offering it. That is the reason I didn't take the offer from another company and instead went to my current one. That other company doesn't offer childcare vouchers and in effect I would be getting £930 less a year (net) as a basic rate tax payer. I can't remember the exact gross pay difference. But I quite a bit. They didn't want to offer me more in base salary to compensate so I just tell them straight why I didn't take the offer.

OP I administer childcare vouchers for my employer and can confirm that once you enter into the salary exchange for these vouchers they become a non-cash benefit. Consequently, once you move onto SMP your employer must meet the cost of the vouchers out of their own pocket.

As a matter of interest, do you have any other benefits with them through salary exchange e.g your pension contributions, any insurance policies??

When on maternity leave you are entitled to any non-cash benefits i.e. company car, phones and childcare vouchers. CV are a bit of a grey area in a purely employment law context but the HMCR position is that childcare vouchers are non-cash benefit (as you have no choice how to spend them) so that is likely to be the Employment Tribunal's position too.

Employers do get a little screwed over by this but no one forced them to provide CV.

If your employer recoups the 'value' from you then you may have a claim for unlawful deduction from wages, breach of maternity regs and sex discrimination. You should tell your employer you will take legal advice if they deduct your salary or withdraw your CV. Make an appointment with union/lawyer/CAB.

I am someone who wishes to work so in preparation for returning to work wanted to make sure I had some wage supported by the childcare voucher, my childcare costs are far more than monthly vouchers. I think the principle of the scheme is to support working families . I have also discovered that employers benefit from this scheme also by not paying ni on salary sacrificed. Their saving outweighs the top up they were obliged to honor but still are wanting recovery and are now suggesting this care be passed to a debt agency. I feel very anxious and now intimidated.

Thank you

Does anyone know if the position is the same if you are receiving SAP rather than SMP?

I am assuming that pensions count as cash benefits so the same does not apply?

They can't take it back off you it's illegal

Potato jog on

I knew nothing of this when I went on maternity leave in 2008 with my second child. I continued to have childcare vouchers deducted from my salary on maternity leave for 12 months but I had organised with my employer to have the the same pay each month so I ended up paying for them all myself. Someone told about this years later...grrrr.