should i cancel my chilcare vouchers while my maternity pay is calculated?

Ama

aimo wrote: »

i have spoken to my hr department who have siad that maternity pay is based on gross wages not net - so i shouldn't need to cancel! thanjks guys!

Aimo

I agree with your HR department about staying in the scheme. This is only beneficial though if you actually need the vouchers.

Your maternity pay will be based on your reduced salary. (ie Gross pay after salary sacrifice) Your net pay is what you actually take home.

Your employer cannot reduce your SMP so no deduction can be made for vouchers from your SMP. This is particularly important when you start receiving the flat rate SMP.

Childcare vouchers is a benefit and therefore your employer has an obligation to provide you with the vouchers for the entire duration of your maternity leave regardless of whether your maternity leave is paid or unpaid. If you decide to go off for a year, then they must continue to give you vouchers till the end of your leave.

matB_2

I did'nt opt out of the CCV in time for my mat pay to be calculated and am now having my maternity pay calculated as if i earn £250 per month less. I am really missing this extra bit of money now as it is like having your pay reduced twice. I'm hoping that there is some way this can be turned around - e.g. Am i paying too much tax now and will there be a rebate? Can only hope - but for now having to be very money savvy so don't get too much into debt on mat leave. I'd recommend that anyone opts out of the CCV scheme in the weeks that pay is calculated and then opt back in again.

ab7167

Ama wrote: »

Your employer cannot reduce your SMP so no deduction can be made for vouchers from your SMP. This is particularly important when you start receiving the flat rate SMP.

Childcare vouchers is a benefit and therefore your employer has an obligation to provide you with the vouchers for the entire duration of your maternity leave regardless of whether your maternity leave is paid or unpaid. If you decide to go off for a year, then they must continue to give you vouchers till the end of your leave.

Is this definitley true? Would help us immensly if it was, seeing as I didn't cancel my CV during the correct weeks. Would be lovely to get some extra money when on the flat rate? I get six weeks full pay and 12 weeks half pay before SMP kicks in, but would I also be right in saying that they can't reduce my 6 weeks full pay below the 90% statutory pay? As I don't think the difference is as much as £243 per month.

Also, I notified HR 6 weeks ago with my original MATB1 and haven't heard back from them yet - should I hear from them, or do I just stop working when I said I would and it will happen automatically. Last time I got a schedule of payments from them , which was very useful!

surreysaver

It depends on your employer. Although it is a 'salary sacrifice', my employer bases everything upon what you gross pay is., including pension - it is only a salary sacrifice as far as tax and NI is concerned. Your employer may work your maternity pay out the same whether you have vouchers or not.

Rae-ann

ab7167 wrote: »

Is this definitley true? Would help us immensly if it was, seeing as I didn't cancel my CV during the correct weeks. Would be lovely to get some extra money when on the flat rate? I get six weeks full pay and 12 weeks half pay before SMP kicks in, but would I also be right in saying that they can't reduce my 6 weeks full pay below the 90% statutory pay? As I don't think the difference is as much as £243 per month.]

Yes it is true! It does sound almost too good to be true! You're right that you can't sacrifice as usual out of the 90% SMP that you get in the first 6 weeks of maternity leave. But if you have any salary above the SMP you can sacrifice that for vouchers. It is only when you drop to SMP alone that your employer covers the cost of the childcare vouchers.

BTW have you all signed the Number 10 petition called Keep Vouchers and the Employers For Childcare ChildcareSOS campaign against the proposed axing of childcare vouchers?

Ama

surreysaver wrote: »

It depends on your employer. Although it is a 'salary sacrifice', my employer bases everything upon what you gross pay is., including pension - it is only a salary sacrifice as far as tax and NI is concerned. Your employer may work your maternity pay out the same whether you have vouchers or not.

Statutory Maternity pay is worked on your taxable income. Childcare vouchers is exempt from from NI and Tax and therefore cannot be used to calculate Statutory maternity pay. It is not for an emloyer to decide how they work out SMP. Any employer who does this is breaking HMRC rules and could potentailly be fined.

Ama

ab7167 wrote: »

Is this definitley true? Would help us immensly if it was, seeing as I didn't cancel my CV during the correct weeks. Would be lovely to get some extra money when on the flat rate? I get six weeks full pay and 12 weeks half pay before SMP kicks in, but would I also be right in saying that they can't reduce my 6 weeks full pay below the 90% statutory pay? As I don't think the difference is as much as £243 per month.

Also, I notified HR 6 weeks ago with my original MATB1 and haven't heard back from them yet - should I hear from them, or do I just stop working when I said I would and it will happen automatically. Last time I got a schedule of payments from them , which was very useful!

This is definitely true. So long as you haven't opted out, your employer must continue to give you the vouchers throughout your maternity leave. If they take you out of the scheme because you are on maternity leave, then that will constitute sex descrimination.

I can't comment on your Occupational Maternity Pay and how it is calculated. However, once your SMP has been calculated, it cannot be reduced again to cover the cost of vouchers. SMP is calculated on your average earnings which is earnings after salary sacrifice.

SMP is payable as follows

6 weeks at 90% of average earnings.
33 weeks at £123.06 or 90% of average earnings whichever is lower.
Then there is 13 weeks unpaid additional mat leave.
Your employer must continue to give you vouchers throughout your 52 weeks leave even if you don't qualify for SMP.

Ama

ab7167 wrote: »

Is this definitley true? Would help us immensly if it was, seeing as I didn't cancel my CV during the correct weeks. Would be lovely to get some extra money when on the flat rate? I get six weeks full pay and 12 weeks half pay before SMP kicks in, but would I also be right in saying that they can't reduce my 6 weeks full pay below the 90% statutory pay? As I don't think the difference is as much as £243 per month.

Also, I notified HR 6 weeks ago with my original MATB1 and haven't heard back from them yet - should I hear from them, or do I just stop working when I said I would and it will happen automatically. Last time I got a schedule of payments from them , which was very useful!

Sorry I didn't address the second part of your question.
Your HR department should write to you with your mat leave dates at the very least. You need to speak to them and make sure they have received your application.