Childcare vouchers whilst on maternity leave

tamdob

Hello there


I am currently 16 weeks pregnant and working part time. I am a member of the childcare voucher scheme (via salary sacrifice) but recently cut down my monthly payment to £50 per month as due to the pre-school funding my childcare costs have gone right down. If I understand this correctly my employer will be obligated to continue paying my Childcare vouchers when I am on maternity leave and as I only recieve SMP this will be effectively be an additional monthly payment which can be used for future nursery fees. My question is whether or not I should at this stage increase the amount of my salary sacrifice from £50 to the full £243? If I can get childcare vouchers when on maternity leave I would obviously want to get the maximum amount but for the moment I don’t really need these and would prefer the extra salary in my pocket for as long as possible.

At what stage can I increase my payment from £50 to the £243 to ensure my employer has to pay me the full amount whilst on maternity leave or is it too late now to do this?

I work for a small company and am the only person using the childcare voucher scheme. When I joined the scheme there were no changes made to my contract and in fact there is nothing in my contract that even says that this is a benefit they provide. I am confident they will have no idea that they are meant to be paying the vouchers throughout my maternity leave, but without this in my contract does this meant they could actually get out of doing so?

Many thanks for any help, it is all very confusing!

CL

I am on maternity leave and also aware of the fact that an employer cannot make deductions from SMP. I think this includes your personal contribution for your pension. I also work for a small private company who are not aware of this. I have not asked for my personal pension contribution to be paid by the company and if I go on maternity leave again, I will not ask for my childcare vouchers to be paid. I think my employers would feel I was taking the p!ss and it would affect my future prospects in the company. It isn't worth it to me. I also think it is a bit of a loophole, rather than something you should be entitled to. Why should your employer pay for your childcare when you are not even at work needing your children looked after.

Savvy_Sue

I'm not sure what basis is used to calculate the childcare vouchers due to be paid while you are on maternity, however if you want the employer to continue to offer the scheme (to yourself and others in the future), do you think it likely they will do so if you manipulate the system to get the maximum out of it at their expense?

I am sure I have read of at least one employer who decided NOT to offer the scheme because of the costs of having to pay during m/l.

onlyroz

CL wrote: »

I also think it is a bit of a loophole, rather than something you should be entitled to. Why should your employer pay for your childcare when you are not even at work needing your children looked after.

It isn't a loophole. SMP is a benefit, not salary, and so cannot be deducted from. And for your second point - when I was on maternity leave with my daughter I kept my son in nursery for three days a week for his social development because I think a (then) 3-year-old should be mixing with his peers rather than staying at home with mum all the time.

Employers who have family friendly maternity policies are far more likely to retain their female employees - as the more enlightened employers are full aware.

CL

Yes SMP is a benefit that gets (mostly) reimbursed to the employer, but the childcare vouchers are not. If they cannot be deducted from SMP the employer has to pay for them. If you work for a small privately owned company, in effect the owner is paying for your childcare.

If a small company is only breaking even and you increase your childcare vouchers and then go on maternity leave, you could be pushing them into a loss. It is not free money.

I agree with the above poster that an employer does not have to offer these and if people start to take the p!ss, they will ruin it for everyone, as the employer will stop offering them.

And by loophole, I mean that when the government decided that no deductions could be made from SMP, I'm sure the intention wasn't that women at home on maternity leave should get their childcare paid by their employer, even if the employer does not want to pay it.

onlyroz

As I said before, employers will gain more in the long run if they take steps to retain their female employees after they've had children. Otherwise they have to spend more money recruiting and training new people, who might also leave after childbirth. Paying out a small amount extra seems like a good investment to me.

In my industry it can cost several £k to recruit somebody new.

CL

I totally agree and am on SMP at the minute and did consider moving to another company who had a better maternity package before I became pregnant, but decided I would be better staying put in the long run. But I know that in my company if I decided to take full childcare vouchers on maternity leave, my employer would have to pay them, but would cancel the scheme as soon as possible after that to prevent it happening again.

PaulaJ65

I am a payroll administrator & you are right over Employers not being able to make any "salary sacrifice" schemes deductions from SMP only - this includes things like childcare vouchers, pensionsaver deductions etc. You need to check your own pension rules over deductions being made from your maternity pay as they all have their own "quirks" - it's only pension deductions being made via pensionsaver that cannot be made from SMP.
As far as I'm aware, you are not allowed to increase your childcare voucher rate once you go on maternity leave - they are set at the rate you had prior to maternity keave.
Hope this helps

I_try

I was advised by our voucher lady to stop claiming the vouchers, if I got pregnant, between week 17 and 25 as this was when maternity pay was calculated and having deductions made before tax would reduce the salary that the pay was worked out from. I don't know if this would be the same as your workplace?

onlyroz

I_try wrote: »

I was advised by our voucher lady to stop claiming the vouchers, if I got pregnant, between week 17 and 25 as this was when maternity pay was calculated and having deductions made before tax would reduce the salary that the pay was worked out from. I don't know if this would be the same as your workplace?

Surely the extra £243 for the vouchers would be greater than any reduction in pay due to the vouchers? After all, you only get the 90% pay for the first 6 weeks of SMP and so it would only be this pay that would be affected by the voucher reduction.

SkintGypsy

The benefit of letting the scheme carry on throughout the qualifying period outweighs the benefit if the extra for your 90% pay. I accrued over £2000 of childcare vouchers, which was handy because my first two salaries were shirt due to a change over from SMP, and I had to pay a month in front for nursery plus a deposit and an admin fee. My company is a large company, but since I have been back they have really had their money's worth. I agree it might be a risk in a small company, which might lead to them cancelling the scheme entirely, but that is something you will need to gauge with your employer.