Car Lease Salary Sacrifice and Maternity Pay

A27_2

Hello,

I work for the NHS and my employer opperates a salary sacrifice scheme to pay for the use of a lease car. In choosing to do this I would enter in to an agreement for 3 years, If I become pregnant during this time I believe a salary sacrifice scheme could affect my maternity pay.

Does anyone have experience of this sort of scheme and if it means you are worse off if you take maternity leave?

I currently earn 25k per annum and would be sacrificing approximately £300 per month (pre tax and NI).

Thankyou

cfnc

Your salary would be effectively £3600 less a year and that is what your 90% maternity pay would be for 6 weeks. The remaining 33 weeks would be paid at the smp level, unless your employers pay more. So in effect you would only lose 90% of approx £450 in total.

However you will need to check with your employer what happens if you just get the 33 weeks smp without enhanced payment as smp cannot be sacrificed as shown below.

How should employers deal with salary sacrifice schemes for employees on maternity leave?

The following will apply to all salary sacrifice schemes, including a scheme for the provision of Childcare Vouchers.



A salary sacrifice scheme may also apply in a car lease situation. For example:

• Option A: use of cheaper car
• Option B: salary sacrifice and use of a more expensive car

Legally, salary sacrifice benefits are contractual benefits and should therefore be paid throughout the duration of maternity leave.
SMP cannot be sacrificed which means that the employer will need to meet the salary sacrifice cost for women receiving SMP only, throughout their maternity leave. Employers will also need to meet the salary sacrifice cost for women who have exhausted their entitlement to SMP (e.g. for weeks 40 - 52).
Employers can deduct salary sacrifice payments from enhanced maternity pay provided this does not impact on the level of SMP. Deduction from enhanced maternity pay, however, may result in an inequitable outcome, with an employee who salary sacrifices receiving a smaller overall package than an employee who does not. Maternity policies should be drafted carefully to avoid this outcome.
Kirsty

rpnptp

ChildCare vouchers/ Maternity/ car lease

I currently purchase £243 worth of childcare vouchers through my salary each month & I lease a car, but before I go on maternity I am planning to return my car back and take the cash allowance......(approx £280)

I understand there has been a change in regulation on the employers side in that the employers are obliged to continue providing childcare vouchers if the employee is already receiving childcare vouchers, on the day she starts her maternity leave.

Statutory maternity pay cannot be sacrificed, therefore an employee cannot fund the childcare vouchers out of her statutory maternity pay. In this case the employer is obliged to provide the childcare vouchers.

If I am receiving my car allowance while I am on SMP can the employer say this would cover the childcare voucher cost (therefore no cost to them?) or am I best to hang on to the car and not take the cash?