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

ianmr65

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kerriem_3

Hi,

About a year ago i persuaded my employer, along with other mothers, to provide childcare vouchers. They chose the salary sacrifice scheme with sodexho.
However, i am currently on maternity leave after having my second child. They give me full pay for 18 weeks and then i drop down to the standard goverment £112 or so for the remainder of the 9 months.
My employers have told me i will have to stop the salary sacrifice scheme when i drop to the Stat pay as my salary is too low. This seems ridiculous as my toddler is still going to be going to nursery and the nursery will still need to be paid. So i now have to find another £80 a month approx to cover what i'm going to lose in tax savings.
The nursery requires my toddler must be in 2 days a week minimum in order to keep his place so i may have to look at reducing his hours to that, but it seems ridiculous that i cannot choose to take my salary (albeit £448 or thereabouts) and sacrifice £243 of it.
Has anyone else encountered this and is there anything i can do about it?

Thanks
Kerrie

Spendless

Can you up the amount you are paying now so you are in credit with the nursery for the months when you can't have the vouchers?

Debbiek

Hi,

I too am facing this problem. I've been receiving childcare vouchers for about 2 years but was told i should come off of the scheme between the 18th and 26th weeks of my current pregnancy as this is the time my NHS trust employers decide the rate of maternity leave i will be entitled to, thus allowing me to earn my maximum possible wage. However, when i contacted HR to be put back on the scheme i was told that they have now decided that it is not possible to claim the vouchers whilst on maternity leave, and as i have only got a few months left at work, i would not be allowed to go back on the scheme at all until i return after having my baby. As i'm only 5 months pregnant, this is now leaving me about £100 per month out of pocket until january next year. Seems slightly unfair to me!!!

kerriem_3

Spendless wrote: »

Can you up the amount you are paying now so you are in credit with the nursery for the months when you can't have the vouchers?

Hi,
Thanks for your reply. I'm already at the maximum you can claim in childcare vouchers - £243. I can't up it anymore unfortunately :-( My husband's company does not do childcare vouchers so we can't switch to him doing the salary sacrifice instead either :-(
Kerrie

kerriem_3

They should really allow you back on the scheme until your pay drops below the minimum threshold - something like £450-500 a month of gross pay I think it is. My company initially wanted me to stop it as soon as i was on maternity but i argued with them that while i was still being paid full salary i was entitled to claim it so they agreed, but i can't see any way around being able to claim it when my salary drops! It really is unfair to mothers of 2+!

Woby_Tide

sadly it's all down to the rules of the scheme, if you take the sacirifice then your wage drops below the minimum wage which they don't allow. We had the same problem for the couple of months we were on SMP, is daft legislation, I'm not even sure who it is protecting, if you were breadlin eon only minimum wage you wouldn't be sacrificing £243 a month I imagine in pretty much every case

ifonlyitwaseasier

the reason you have to leave the scheme because of pregnancy is that you'd drop below the minimum wage and it can affect the way your SMP is calculated.

i used to work for one of the big three voucher providers and they are all pretty good, for refunds they all insist that it has to go back thro the company as the tax and ni needs to be taken from the amount refunded.

if you have any questions i'd be happy to answer them if i can

noviceanne

I exchange £243 per month of my salary for childcare vouchers. I exchange them for part of the cost of childcare and don't pay tax or NI on that amount.

I understood that I should deduct this amount from my total salary on my annual declaration. (I didn't do this last year and wrote to rectify the matter, or so I thought)

This month I updated my childcare costs and am reminded that I have been overpaid by almost £3000 so I phoned for an explanation as I have always provided the required information in a timely manner, I don't undersatnd why this should have happened.

I was told that the guidance re salary sacrifice schemes for childcare vouchers requires me to send the following information to a specialist team for assessment
contract variation form
payslips from before and after joining the scheme
Agreement between employer and benefit provider
Booklets about the schem

Has anyone else been asked for all this?

ernie-money

Snafflepants wrote: »

Hiya, I'm really confused by what your employer has said.

I use busy bee vouchers and the money for my child care comes out of my monthly wages.

Busy Bees send a bill for the amount of my childcare fees. They are above the £267 monthly threshold - approx £300 a month.

My employer send the money across and it appears in my online account a few days later. The money is then taken out of my wages and I get paid the rest. The Tax and NI on the £267 are not taken by the IR and the remained £33 is taxed etc.

It saves me approximately £60 a month. We could save more if we both did the vouchers but it never got sorted.

I am confused why how much you earn should affect how much you benefit? (obviously if you don't earn if enough to cover the fees you couldn't pay them out of your wages). If you pay £300 in child care surely you are better off if you can get tax relief on £267 of it regardless of whether you earn high or low? If you pay it direct to the nursery you are paying the full £300 whereas through BusyBees you are saving the tax and NI relief. Sounds like a cop out to me? I also thoguht that employers get a benefit out of it (but payroll tell its a small relief only)

Maybe I am missing the point?

Hi,
Sorry it's taken a while to reply - I only just spotted your post!
No, I've since looked into it and I don't think it's a cop out - more like a flaw in the system, (as I see it) stopping people on minimum wage from benefitting from it.
The problem is that you are not allowed to sacrifice anything that would take your income below minimum wage, so even if it would hugely benefit me to do so, as I have to pay for childcare regardless of being on minimum wage, it is not allowed!
Hope this helps...