NHS Salary Sacrifice Car Scheme / Maternity Leave

[SLJ92x]

Hi,

Has anybody worked for the NHS and done their salary sacrifice car scheme (Ours is through Knowles Fleet) and gone onto maternity leave during the scheme?

I’m just wondering how it works with that and if it affected your maternity pay?

Debating doing it for peace of mind motoring but also wary as we want another baby in the next few years.

Thank you!

Yes it will be a double whammy as it will both reduce your maternity pay itself and your car payments will also actually go up while you are on maternity leave. Please contact your payroll for advice about this because I don’t think you understand how the scheme works or possibly how little maternity pay you will be in receipt of.

NHS maternity pay is calculated on a specific 8 week block (approx 16-24 weeks before due date, see your contract). Therefore if with the salary sacrifice vehicle your annual salary is about £7000 lower, then your maternity pay will be based off of this lower salary. NHS maternity pay is 8 weeks of full pay (based on your new, lower salary) followed by 18 weeks of half pay, followed by 13 weeks of statutory maternity pay (SMP).

When you get into your SMP period you will have two options:

1. Continue with the scheme but pay by standing order on a “NET” deduction basis (ie at a higher rate than your salary sacrifice payment and including VAT. (Eg a £320/month salary sacrifice payment would be £518/month pre NI and tax, or a higher payment still if you’re a higher rate tax payer)
2. Return the car to NHS fleet solutions and pay an early repayment charge (usually several thousand pounds).

My personal opinion is that an NHS car hire is a dreadful idea for anyone planning on going on maternity leave, unless you are a higher rate tax payer who is planning on only taking a few weeks of maternity leave. If you google something like “NHS fleet car higher maternity leave” then you should get a lot of worked examples and also see quite a few stressed out posters on various boards who didn’t understand the terms of their lease hire.

Good luck!