Childcare Vouchers: cut childcare costs by £1,000/year Discussion Area

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  • nightfrogs
    nightfrogs Posts: 5 Forumite
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    Apologies if this has been asked before (similar to 2 posts above but slightly different).

    I am on my company's voucher scheme but my partner's employer does not offer it so we only get £243 after tax as vouchers/month.

    Our chilcare costs are close to the £10k/year so presumably, on the new scheme, we'd get double the amount (up to £2k tax free (+ reduction in salary sacrifice & increased company pension contribution)?

    Thanks!
  • rpc
    rpc Posts: 2,353 Forumite
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    Currently, you save ~£900 a year assuming that you are a basic rate taxpayer.

    Under the new scheme you will save 20% (~£2k).

    Fairly easy decision...

    Your salary will increase which can affect other things. You pension is down to the rules your employer uses (vouchers don't affect mine).
  • afly
    afly Posts: 105 Forumite
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    With the scheme being scrapped to new entrants soon does anyone know if there anything to suggest the government will stop honouring vouchers in the years to come? Or that care facilities will stop accepting them?

    What I don't want to do is spend year 1 acquiring vouchers whilst the wife in on mat leave only to find in year 2 when I need to use them that no-one will take them anymore :(
  • rpc
    rpc Posts: 2,353 Forumite
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    afly wrote: »
    With the scheme being scrapped to new entrants soon does anyone know if there anything to suggest the government will stop honouring vouchers in the years to come? Or that care facilities will stop accepting them?

    Nope. Plan seems to be that the two schemes will run in parallel and vouchers will wind down as people naturally stop claiming them. There may be a reduction in the number of voucher providers over time as the reducing number of participants might make them unprofitable to run, but that will take a while.
  • cheesemason
    cheesemason Posts: 106 Forumite
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    Hoping someone can help me with a query, because I cant seem to find the answer on Google anywhere.


    I get childcare vouchers under the old system. I will soon be getting a payrise which (with bonuses) may take my annual income to over £45k (also may not!)


    For argument sake, say with bonus I get £46k. Now on the face of it, that would mean the amount of childcare vouchers I get falls to the £124 a week from £243 a week


    However, our pension is salary sacrifice. So saying I put £4k into a pension, that takes my salary down to £42k


    Would that mean I would still get the £243 a week, or do they not include the pension bit
  • cheesemason
    cheesemason Posts: 106 Forumite
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    Actually found a good article on the gov.uk website (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/368483/employer-qa.pdf)


    This seems to suggest that it is worked out after pension has been deducted and also doesn't include most bonuses (mine is company and personal performance related, so could in theory be zero)


    If that's the case, I am way under the threshold, which would be nice!


    Can anyone confirm that I am right please?


    Thanks
  • onlyroz
    onlyroz Posts: 17,661 Forumite
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    Do you have protected rights? If you've been claiming vouchers since before April 2011 then you can keep the £243 a month regardless of your salary.
  • cheesemason
    cheesemason Posts: 106 Forumite
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    Only been claiming two years unfortunately
  • rpc
    rpc Posts: 2,353 Forumite
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    Your employer will do a basic earnings assessment at the start of every tax year. That determines your eligibility regardless of your actual income during the year. If the one carried out for the 17/18 tax year says that you are below the threshold, your eligibility isn't changed until the next assessment in April 2018.

    More detail here: http://www.computersharevoucherservices.com/employers/Pages/The-Basic-Earnings-Assessment.aspx


    If you look at the manual linked to from that page, you see what is excluded. Also note that your bonus is only included if it is contractual.

    In short, your occupational pension (but not any personal pension) reduces your income for the purpose of getting more childcare vouchers.
  • cheesemason
    cheesemason Posts: 106 Forumite
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    What is classed as a contractual bonus though? In my contract it says if I perform well and the company performs well I will get x%. If I don't or the company doesnt its on a sliding scale down to zero

    Would that bonus be excluded?

    Cheers
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