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Original poster

Childcare vouchers whilst on SMP ?

29 replies

joanne34 · 18/01/2010 12:22

Hi All,

I just wondered whether anyone has a strong understanding of this ?
I was told today by a lady who has just come back from Maternity leave, that she signed up to the childcare voucher non-cash salary sacrifice scheme at work before she went on maternity leave with her DC2.

She said she received full SMP, plus the Vouchers ontop.... of which these she could use on childcare for DC1 or like she did, save them up for DC2 once she'd returned to work.

Apparently, these should not affect your SMP, and not be deducted from the SMP.
Does anyone else have secure evidence of this ?
Plus did it affect your NI and TAX, therefore reducing the SMP amount ?

I have 4 weeks to get this all sorted.... if its true its a fantastic idea, as I dont have childcare vouchers for DC1 at the moment, but I need to get signed up ASAP...

Thanks

OP posts:
EvilHRLady · 18/01/2010 13:05

I wouldn't claim to be an expert on this, but my understanding is that since the vouchers are a salary sacrifice, they are treated differently to salary for the purposes of calculating SMP / any enhanced pay. In effect, this means they continue untouched (as do some other benefits) during any period of maternity pay.

You are probably just as well speaking to someone in Payroll, or from your voucher provider.

EvilHRLady · 18/01/2010 13:05

I wouldn't claim to be an expert on this, but my understanding is that since the vouchers are a salary sacrifice, they are treated differently to salary for the purposes of calculating SMP / any enhanced pay. In effect, this means they continue untouched (as do some other benefits) during any period of maternity pay.

You are probably just as well speaking to someone in Payroll, or from your voucher provider.

TheWorldFamousKewcumber · 18/01/2010 13:10

vouchers are not necessarily salary sacrifice.

If they are then you can only "sacrifice" the salary you have (ie SMP) so wouldn;t be able to get both SMP AND childcare vouchers.

Some employers (not many) pay childcare vouchers on top of salary in which case yes you could get both.

Or her payroll people made a mistake - one of those three options (I think!)

MrsBadger · 18/01/2010 13:19

[raises hand]
yes, I have a strong understanding of this (have just done it for dd's nursery fees while on matleave for dc2) and EvilHRLady is right.

the vouchers are a non-cash benefit and, like any non-cash benefit eg gym membership, company car, you are entitiled to them in addition to SMP.

MyLilRooster · 18/01/2010 13:24

If you have salary sacrifice childare vouchers prior to maternity leave then you are entitled to them while on leave, on SMP as they are a non-cash benefit as already stated by others. They are unable to deduct from your wage, as you have no wage to deduct from. They cannot stop them because you are entitled to the same benefits you recieve while you are at work (same as accruing leave/bank holidays)

However, I am wondering if this benefit is only applicable if you are already claiming them at 15wk prior to EDD to be eligible? To stop people starting to claim them just before they go leave.

MyLilRooster · 18/01/2010 13:26

(SMP is not a salary either afaik, have been through this with payroll at my work for other reasons, and also in relation to ctc and it is not a salary according to them)

flowerybeanbag · 18/01/2010 13:28

Am posting one-handed so can't say much but see here, especially my link to HMRC guidance.

TheWorldFamousKewcumber · 18/01/2010 13:35

as an employers thats quite useful for me to know that if we get anyone already on vouchers we need to keep paying...

Original poster
joanne34 · 18/01/2010 13:49

MyLilRooster

Thats interesting about the 15th week etc... I have emailed HR and am awaiting confirmation, shes probably looking into it.

I havent claimed them before because, up until last July, I was receiving a small amount of tax credits for childcare re DC1.

I should have started these ages ago, to benefit myself anyway, but my sieve pregnancy head has been tightly screwed on.

Thanks for the advice !

( sorry i posted twice, im sure i hit preview )

OP posts:
Original poster
joanne34 · 18/01/2010 16:42

Another question regarding the above;

So if I were to join the scheme from the 1st feb, my first sacrifice payment would be on the 27th feb ( our normal payday ).
And that is when the e-vouchers are processed and can be used..... BUT

I am due on Maternity leave from the 1st March....All fine... BUT.... I was 11 days early with DC1..... what happens if I am early, because they have to start my maternity leave from the babys birth date at the latest !

Help ?

OP posts:
Original poster
joanne34 · 18/01/2010 16:43

Sorry should have added, my actual due date is the 8th March.....

OP posts:
flowerybeanbag · 19/01/2010 09:40

Joanne as long as you are in the scheme and therefore receiving the benefit of childcare vouchers by the time you go on maternity leave, you will remain entitled to receive them throughout your maternity leave.

Original poster
joanne34 · 19/01/2010 09:46

Thanks Ladies.

OP posts:
tostaky · 28/01/2010 10:05

But this is what it says on my intranet?..
By law, Xxxx cannot continue to make the appropriate deductions for Choices benefits from SMP. What happens subsequently depends on the Choices benefit.
Childcare vouchers: provision of vouchers is suspended.

Is it because my childcare vouchers are a salary-sacrifice then and not an employee benefit?
It is very confusing, I always thought that my salary sacrifice was an employee benefit...

flowerybeanbag · 28/01/2010 10:09

They are a benefit tostaky. Your employer can't choose which benefits are suspended during maternity leave and which carry on, the law says that you are entitled to all your contractual benefits during maternity leave. A different law says that deductions for salary sacrifice can't be made from SMP.

A salary sacrifice means that you have elected to receive a smaller annual salary in return for a benefit. The result of these two laws is that you get childcare vouchers during maternity leave but don't pay for them.

flowerybeanbag · 28/01/2010 10:13

If you think of it a different way, because you have sacrificed part of your salary, your SMP will be lower. The first 6 weeks of SMP are paid at 90% salary, so if you'd chosen not to receive childcare vouchers and keep your original salary, you would have had a higher rate of SMP.

Because you elected to sacrifice some salary and get a benefit instead, your SMP will be lower but you will continue to receive the benefit.

tostaky · 28/01/2010 10:42

flowery thanks - but why do they say on the intranet then that the childcare vouchers will be suspended?
And how can i tell them that i still want them?
It looks quite clear: mat leave = childcare vouchers suspended.
Do i have to tell them they are wrong?

flowerybeanbag · 28/01/2010 13:02

Yes they are wrong, and yes you will need to tell them.

This document is clear about the issue, see particularly page 26, which specifically states that non-case benefits must continue to be provided during maternity leave, and even gives a list of non-cash benefits including childcare vouchers.

tostaky · 28/01/2010 13:20

ok I'll send this to HR and blame mumsnet for everything!!!
Thanks!

tostaky · 28/01/2010 13:22

oh and if they still say no, what recourse do i have?

flowerybeanbag · 28/01/2010 13:28

Ignore the page reference I gave earlier, it's page 13.

If they refuse to provide non-cash benefits during maternity leave it is sex discrimination, so you do have significant recourse. Page 12 of that document specifically confirms that failure to provide non-cash benefits will enable the employee to bring a sex discrimination claim.

tostaky · 28/01/2010 13:54

Thanks - i have sent them an email asking for clarifications.
If they say no, what do I do? Should i go to the citizen advice office? or where else?Because hiring a lawyer is not just worth the expenses and the fuss...?

flowerybeanbag · 28/01/2010 14:03

If they say no your first step is to bring a grievance for sex discrimination. There is plenty of hard information backing you up. A grievance claiming sex discrimination will make sure they take some advice and/or look into it properly, so should do the trick by itself. Hopefully you won't need to go as far as any kind of legal claim. Even if you do, you wouldn't necessarily need a lawyer. You can in theory bring a tribunal claim yourself. I wouldn't normally recommend it but yours would be a very straightforward factual claim so it might be worth considering.

If they say no, a grievance should do it though.

tostaky · 28/01/2010 14:57

How do I bring a grievance?
I am asking because I had to fight for everything everytime I was pregant (like time-off work for midwife appt) etc...
thank you for all your advice flowerybean!!

flowerybeanbag · 28/01/2010 15:00

Your company should have a grievance procedure which will tell you exactly what you need to do. If your company has an intranet site it will probably be on there. It could be in a staff handbook if you have one of those. If you can't find it anywhere, just ring HR and ask for a copy.