Childcare Vouchers/MoneySavingExpert.com Discussion

crankup

How much is your childcare? Nurseries in our area are about £32 per child per day. We only have 1 child using them now and he is there just 2 days a week. If we had to use them 5 days a week it would be nice to see the £50/week cap lifted. Why is this cap so low?

Let's get teachers on the list, and at least double the cap!

Spendless

crankup wrote:

How much is your childcare? Nurseries in our area are about £32 per child per day. We only have 1 child using them now and he is there just 2 days a week. If we had to use them 5 days a week it would be nice to see the £50/week cap lifted. Why is this cap so low?

Let's get teachers on the list, and at least double the cap!

Currently £28 a day, includes breakfast, lunch and tea. Get 2 free weeks a year. Time 8-5.30. About to change her to a nearer nursery that is £24 a day same times but no breakfast or free 2 weeks. I'd also like to see amount raised and no it isn't fair on teachers.

sooz

crankup wrote:

How much is your childcare? Nurseries in our area are about £32 per child per day. We only have 1 child using them now and he is there just 2 days a week. If we had to use them 5 days a week it would be nice to see the £50/week cap lifted. Why is this cap so low?

Let's get teachers on the list, and at least double the cap!

wow...i paid £65 per day for under 2's, and £45 per day for over 2. banks hols closed, closed 1 week at easter and 2 at xmas.[this is price for pay 3 months in advance. more for pay per month, or ememrgency days]

[london prices - and they weren't the most expensive]

henhog

I can't remember exactly what I wrote in my email to my MP - something along the lines of : Are you aware that teachers can't join in the scheme - could he investigate this etc. It turns out from his reply that he wasn't aware of this loop hole, he thinks it's unfair and wants to raise the issue further.
Martin seems to have picked up on our plight and maybe he will draft a letter we could send to our MP's and unions.

Former_MSE_Andrea

Martin's started a specific discussion for teachers to keep all the comments in one place here

moneysavingamatuer_2

Further to Timilton and Kev7dags threads I have also been told the same as Timilton. Our local Personnel Flight hadn't heard of it but phoned the central pay office and were told that it would not come into force until at least 2007. I do not understand what the delay is for and they would not ellaborate. With the armed forces trying to save money constantly, this is an outrageous oversight. I have spoken to the HIVE about it and the Airwaves rep. They are supportive in trying to push the case. Maybe if enough people where made aware of it and started asking questions we might get somewhere. I don't think we should let this lie. Contact your HIVE and Welfare Services and get the questions asked. Could Martin offer any further advice as to whether there is a case similar to teachers and whether MPs might have any influence on the Armed Forces.
Thanks

Hiram

Busy Bees - A Cautionary Tale With A Potential Sting

Do you know someone working for the NHS who is about to buy a computer through their work, or have part of the cost of childcare paid through their work? Then read on – because these so-called ‘salary sacrifice schemes’ are increasing in number and variety, and they contain hidden dangers.

One such salary sacrifice scheme is ‘Busy Bees’, which has been advocated in many NHS Trusts throughout the UK. In my own Primary Care Trust, the ‘Busy Bees’ scheme was introduced as part of the ‘Improving Working Lives’ initiative. The idea is that part of the employee’s salary is paid in the form of childcare vouchers, which can then be used to pay the childcare provider. The main advantage claimed by the scheme is that, by taking part of your salary as a voucher, you do not have to pay National Insurance contributions on that sum. For example, by taking £200 per month in childcare vouchers you would save approximately £200 per year in National Insurance contributions. The employer also benefits, so, in theory, everyone should be happy.

However, in practice you can lose more in pension and other benefits than you save in National Insurance contributions. In my own Trust, the information leaflet supplied about the ‘Busy Bees’ childcare voucher scheme assured applicants that joining the scheme, “will not affect your basic state pension or company pension”. However, ‘Busy Bees’ childcare vouchers do reduce pensionable pay and can therefore, reduce pension (and other) benefits. If any pension benefits, such as ill health retirement, early retirement, redundancy, pension transfers, death benefits, become payable whilst participating in the Busy Bees voucher scheme, or within a year of leaving the pension scheme the benefits available will be significantly reduced. Many statutory benefits, such as working tax credit and statutory maternity pay are also based on ‘headline’ pay- and these could also be affected. If you leave NHS employment within three years of participating in the voucher scheme your NHS pension benefits will also be reduced, as it will have affected the average pensionable pay on which your pension will be calculated.

Take three examples, based on a person whose average salary is £1,200 monthly, of which £200 is taken in the form of childcare vouchers.

Death benefit - Dependents receive two year’s salary, which would have amounted to £28,800 outside the voucher scheme, but which will be only £24,000 within it.

Early retirement – Pensionable pay is based on the average monthly salary over the last three years of service. This means the pension will be calculated on a salary that is £200 per month less than it would have been without childcare vouchers. That means £600 a year less pension for a person with 20 years service.

Maternity pay – Under current NHS arrangements, the person who opted for the vouchers would receive almost £600 less in maternity pay than the person who avoided the scheme. There would also be a loss of statutory maternity pay as well.

The NHS Pensions Agency said about Busy Bees’ claims, “The Agency is aware of the Busy Bees’ statement that vouchers will not affect basic state pension or company pension and although this may be accurate for some schemes, this is not the case in respect of the NHS Pension Scheme and indeed other such Schemes such as the Teacher’s Pension Scheme.”

After you stop receiving Busy Bees vouchers, it will take another three years of NHS employment for your pension to recover from the effect of Busy Bees vouchers. Similar offers to help working families purchase computers through salary sacrifice schemes may produce the same results.

One other important point to note is that salary sacrifice schemes can also permanently affect your contract. The NHS Childcare Toolkit III ‘The New Dimension’ - published by the Department of Health and the Daycare Trust - refers to the fact that “The employee does not retain the right to return to the previous level of salary”. This means that joining a salary sacrifice scheme could involve a permanent pay disadvantage.

I would never have chosen to take Busy Bees childcare vouchers if all the facts from the NHS Pensions Agency had been properly stated to me at the time. In my view, the potential loss of benefits far outweighs any saving of National Insurance contributions. You may decide otherwise, but at least by reading this article you will be better informed than I was.

For more information:

NHS Pensions Agency, Hesketh House, 200-220 Broadway, Fleetwood, Lancashire, FY7 8LG.

https://www.hmrc.gov.uk/childcare/, which includes a section, titled, “Salary Sacrifice Guidance.”

randomspam

Hello

I have a question, I think I already know the answer but I thougth it would be worth a shot.

We have the childcare voucher scheme in our company, I am entitled to use it. My wife is a registered childminder and looks after 2 children separately during the week and our son at the same time. We've been advised that we can't claim vouchers for our own childcare as a parent is looking after the child. Our argument would be of course that as a registered childminder she would look after an additional child if she wasn't looking after him and therfore gain additional income so why can't she gain income for our son anyway. I guess in short he is beeing looked after by a registered childminder but we're not allowed to claim vouchers.

Wondered if anyone had ever looked further into this option, it seems a bit silly to me but then it would as we disagree with it Has anyone found an alternative use for the childcare vouchers, seems a shame to waste this saving.

Thanks

[Deleted User]

I heard that if you swap part of your salary with vouchers your Child Tax Credit will be affected making it in some cases not worth it. How do I calculate if it is convenient? TIA

Woby_Tide

it's only if you get Working Tax Credit that it is affected, Child Tax Credit awards on their own should be unaffected. If you claim vouchers for childcare, you can't claim that amount as part of your childcare costs for tax credit purposes. I.e. if you currently claim for £400 childcare costs on your tax credit award, if you then take the £217 allowance as vouchers you would only be able to claim £183 childcare costs on your tax credit award (e.g £400 -£217 vouchers claimed). Best bet is to contact Tax credit office to explain how it affects your circumstances