Childcare vouchers on maternity leave?

KaratePigeon

Hi,
I know this is a question which has come up before but I have done a search of the older posts and nobody seems to know for sure and I don't know where else to ask, so thought I would ask again, and if not, does anyone know who I would ask to get a definate answer?

Right, I am currently recieving the maximum childcare vouchers £243/month which goes towards my son's nursery fees while I'm at work. I'm due to go on maternity leave in a couple of months, and I know most people (at other companies) continue to get the vouchers while they are on leave. I don't get any extra money during mat leave, and from what I've read on the hmrc website, I'm entitled to all non-cash benefits during mat leave, and the childcare vouchers can't be sacraficed out of my SMP as they are not allowed to pay me less than SMP.

My HR department (small company so only consists of one person!) says they won't continue to provide the childcare vouchers as it's not contractual. Apparently it doesn't say in my contract anything about them, as it's just a choice they offer as salary sacrifice, and we are not forced to take them, so it doesn't count as contractual. I don't understand this, but that is the only explanation they gave me, and they don't seem too sure themselves that it is right, does anyone know, please?

Thanks.

Caroline73_2

Do you mean you buy the childcare vouchers from your wages before they take the tax and NI off like BusyBees?

KaratePigeon

Yep, that's the ones

honeypop

I was recently looking into this myself.

http://www.hmrc.gov.uk/employers/sml-salary-sacrifice.pdf

That link shows them that they should in fact carry on paying the childcare vouchers. It's a long winded document, but does explain towards the end, that salary sacrifice schemes are actually contactual and should carry on while on maternity leave. Employers often make the mistake of thinking they are deducting the amount for the childcare vouchers from your monthly salary, when in fact they should be contractually reducing your salary by the equivalent amount and then paying the childcare voucher instead.

fiona242

You are entitled to the vouchers (and in effect this amount has already been deducted from your maternity pay!)

When you sign up to a salary sacrifice scheme you are effectively giving up part of your salary for an extra benefit
e.g. Instead of being paid £10,000 p/a you will now be paid £9,000 + £1,000 worth of childcare vouchers

This concept is very important, as it allows you and your employer to receive tax and NI relief on that amount.

During your first 26 weeks of maternity leave you are entitled to all the same benefits you would have received had you been at work - including those childcare vouchers
After 26 weeks i'm afraid its up to your employer's policies.

(Also, your SMP is calculated on an average of previous pays - that was based on the lower salary amount! If they deducted the amount again they would be deducting it twice!)

If you still can't get anywhere contact your local tax office, or failing that ACAS.

Hope this helps

KaratePigeon

Thankyou both,
I already showed them that link that honeypop provided, as I interpreted it as, like you both said, I'm entitled to the vouchers.

They actually calculate my 90% SMP on my full salary -(ie before salary sacrifice) which is a bit weird, and in my contract everything is based on that, they are just saying that they just offer the vouchers as an option, not a contractual thing. We can take/change the amount/cancel them at any time. Also any we don't use on childcare we can request to get paid back through payroll (ie get taxed etc on it but get the money back). In that case what is stopping me from getting the vouchers while on mat leave, then getting them converted into cash instead? (I wouldn't do that, but I don't understand what would stop people doing it?)

So to confirm, all employees who are offered childcare vouchers, should be entitled to them during mat leave - is that right, with no exceptions? (as I don't want to fight for this and then turn out to be wrong!)

Thankyou for any help!

surreysaver

KaratePigeon wrote: »

they are just saying that they just offer the vouchers as an option, not a contractual thing.

They are optional, but if you take that option, they are contractural. You contract of employment changes.

Googlewhacker

what benefit is there to the employer then in doing this if they have to pay this during maternity leave. Just another cost they could avoid?

surreysaver

Googlewhacker wrote: »

what benefit is there to the employer then in doing this if they have to pay this during maternity leave. Just another cost they could avoid?

They save on tax and national insurance. Same as someone who isn't on maternity leave...

Judith_W

When you signed up for childcare vouchers you should have signed an addendum to contract to agree to reduce your salary in exchange for the same value of childcare vouchers. If you did then I can't see how they can say it is not contractual. Also if you haven't, and have been getting them for a while then even if you do not have a written contract you still have a contract.

Also, the reason you have have them is due to the sex discrimination act amendment so if other employees are still being offered them whilst they are working, you are being discriminated against as only women go on mat leave. I'm sure HMRC would be able to back you up.

fiona242

KaratePigeon wrote: »

They actually calculate my 90% SMP on my full salary -(ie before salary sacrifice) which is a bit weird, and in my contract everything is based on that, they are just saying that they just offer the vouchers as an option, not a contractual thing. ......

So to confirm, all employees who are offered childcare vouchers, should be entitled to them during mat leave - is that right, with no exceptions? (as I don't want to fight for this and then turn out to be wrong!)

If your childcare vouchers are through a salary sacrifice scheme, them yes you are defintely entitled to them.
(I've recently had the same situation processing maternity leave for someone in my own work)

As for you SMP, if your employer is calculating this on your full salary they are wrong! SMP should be calculated on your NI-able pay, so if the scheme really is salary sacrifice then your NI liability is reduced. The calculations should be based on that lower figure.
This is not contractual, so its not up to them which figure they use
Any additional occuptional pay may be different, but your right to childcare vouchers shouldn't be affected

I can't post links yet, but there is a good explaination on HMRC website (try searching for maternity leave and salary sacrifice on their website)