Slightly different question about SMP/childcare vouchers...

[anothercoldcupoftea]

... I think! Have read through the previous thread and don't think it covers my issue, but apologies if I've missed it.

I'm currently on maternity leave with DD2 and as per my employers (less than generous) benefits, I get:

1. statutory maternity pay
2. 'car allowance' - continuation of small cash payment each month
3. return to work bonus - again, continuation of a small return to work bonus spread out over 12 months after coming back to work after DD1 was born
4. also, childcare vouchers

It was my understanding that the childcare vouchers would, under the new rules, be continued, without any deduction from 1-3 above. (hence an additional cost to my employer)

However, looking at the last couple of payslips, my employer has deducted the cost of the vouchers from 2 & 3 (they just cover it). I queried this, and they state that as 2 & 3 are 'salary' they can continue to deduct the cost.

Does anyone know if they are right, or where I could get a definitive answer from? I would have thought that 2&3 are not actually salary - but are cash benefits - and so they can't suddenly start deducting the cost of the vouchers from those, just becuase there is no actual salary being paid to sacrifice?

Help! I don't really want to start arguing with them unless I'm sure they are wrong (partly because my boss thinks maternity benefits are way too generous anyway!).

Page 14 of This:

www.hmrc.gov.uk/employers/sml-salary-sacrifice.pdf

would appear to count the car allowance as a "contractual cash benefit" which your employer doesn't actually have to pay you when you are on maternity leave; it says they are treated as renumeration (salary) so yes I would have said they could take the vouchers off them. Similarly with the bonus; I can't see how that isn't treated as renumeration, so I would imagine they are within their rights. Sorry.

(disclaimer; I just looked it up. I'm not a lawyer!)

Thanks - I suppose it comes down to whether the salary sacrifice agreement specifies what is salary and what isn't. Suppose I'd better dig out my papers.

Cheers
Claire

The only payments it is not legal to deduct salary sacrifice from are statutory ones such as SMP. Anything else is between the individual and the employer.

In terms of car allowances, it's not actually 100% clear cut whether you remain entitled to them during mat leave at the moment, depending on the wording of it in your contract. If it's a case where you are receiving it to fund a car instead of electing to take a company car that you would otherwise be entitled to, then it's more clear cut. But if an employer could legitimately argue that it's remuneration rather than a benefit, they may not have to pay it you. They may well be doing so to be safe and as a matter of good practice though.

Your 'return to work bonus' definitely sounds like remuneration though. Whether the amounts for your childcare vouchers can be deducted from it depends entirely on the wording of the scheme, and whether it says 'basic salary only' or something similar.