Childcare vouchers whilst on maternity leave

[BoffinMum]

I am wondering how childcare vouchers work while you are on maternity pay. Is the amount effectively deducted from notional gross salary as usual, or from maternity pay salary equivalent? What happens when you go onto lower SMP rate? Childcare vouchers would surely eat up practically the whole lot?

Hi,

I am no expert but was advised to cancel vouchers from 11 weeks pregnant (I think!) because maternity pay would be adversely affected if I continued to claim.

Hope someone else can offer you more comprehensive advice soon.

I think that as childcare vouchers are a non cash benefit, you should be entitled to continue to receive them at exactly the same value as before in additon to your maternity pay.

I believe they are treated in the same way as a company car benefit, i.e. not taken away from you whilst you are on maternity leave.

The reason that some mums cancel their vouchers from early on in pregnancy is so that their taxable gross pay goes back up to the full amount (that it was at before salary sacrifice for tax free child care vouchers) and this then maximises the higher rate maternity pay level usually paid for the first 6 weeks of maternity leave.

I think you need decide whether you will be continuing to use childcare whilst you are on maternity leave and do the maths as to whether you would benefit from cancelling the childcare vouchers for a while to maximise maternity pay for those first 6 weeks (or longer if your employer operates a more generous maternity pay scheme than the SMP minimum).

Hope this helps.

IIRC you can still apply for vouchers during mat leave but you still have to pay for them so need to ensure your SMP covers the amount. Your employer is under no obligation to provide them for free.

I've just gone onto mat leave and will continue to buy my vouchers through my salary sacrifice scheme (I buy £243 worth a month) all the time I am earning enough to do so. My SMP is topped up by my employers, but when I go onto SMP only later on in the year, I shall cancel for a few months until I go back to work and start getting paid again.

I'm also not using my vouchers but am storing them up so when I do go back to work later in the year and have 2 DCs to pay nursery fees for, I already have a fair old stash of money (well that's the theory anyway) which I hope will keep me going until DD is 3 in June 2010 and I get a few hours worth of government help.

www.daycaretrust.org.uk/mod/fileman/files/employer_support_and_maternity_leave_07.08.pdf

I have done some searching and found a document here that is very interesting. If your baby is due after October 2008, and you only get SMP, then it seems the employer has effectively to give you the vouchers for free! This appears to be because of Sex Discrimination legislation.

Have I saved you some money, LittleMissNorty??

OOOhhhhhh.....thanks Boffinmum ....may have to have a discussion with my payroll team