Employer might be stopping childcare vouchers scheme

BabyElephant

Not sure if this is in the right place so apologies if it isn't! I currently salary sacrifice to get childcare vouchers and will be going on maternity leave shortly where I will be entitled to SMP. My employer is aware that they still have to provide childcare vouchers in addition to the SMP so in effect they are "paying" for them.

Apparently because of this situation they are thinking of stopping the childcare vouchers scheme to avoid having to pay out.

Anyway, my question is does anybody know how much notice my employer has to give me if they do decide to withdraw the scheme?

Plans_all_plans

I'm not sure, but ACAS may be able to tell you http://www.acas.org.uk/index.aspx?articleid=1461 It's worth a try, I notice they have a "parents and carers helpline".

DaisyFlower

They can withdraw the scheme at any point I believe as its a benefit and not a contractual one. They are likely to give 30 days notice though.

More and more are pulling the scheme due to the loophole as it costs them money.

thunderbird

BabyElephant wrote: »

Not sure if this is in the right place so apologies if it isn't! I currently salary sacrifice to get childcare vouchers and will be going on maternity leave shortly where I will be entitled to SMP. My employer is aware that they still have to provide childcare vouchers in addition to the SMP so in effect they are "paying" for them.

Apparently because of this situation they are thinking of stopping the childcare vouchers scheme to avoid having to pay out.

Anyway, my question is does anybody know how much notice my employer has to give me if they do decide to withdraw the scheme?

I may be missing something here - but why would you need childcare vouchers if you are on maternity leave?

Emmzi

to hold the child's place open when mum returns to work?

Plans_all_plans

Thunderbird, I know plenty of working mums who keep their oldest kids in nursery while on maternity with the younger one!! Maybe it's cos they'd have to pay anyway.

pinkshoes

I've also just started getting childcare vouchers as I've just returned to work, but don't understand why a company would have to pay them to you when you're on maternity leave, as they're not a benefit, they're something you buy before tax.

Someone please explain?!?!

BabyElephant

DaisyFlower wrote: »

They can withdraw the scheme at any point I believe as its a benefit and not a contractual one. They are likely to give 30 days notice though.

More and more are pulling the scheme due to the loophole as it costs them money.

Thanks for the info.

thunderbird wrote: »

I may be missing something here - but why would you need childcare vouchers if you are on maternity leave?

Because I need to keep my DD in nursery at least one day a week to keep her place. As it is the waiting list to get the new baby in at the nursery is 15 months!

Plans_all_plans wrote: »

I'm not sure, but ACAS may be able to tell you http://www.acas.org.uk/index.aspx?articleid=1461 It's worth a try, I notice they have a "parents and carers helpline".

I'll give them a call - thank you.

SkintGypsy

The scheme is salary sacrifice, but no deductions can be made from SMP, so the terms and conditions are that they will pay that on top of SMP. It us the same for a pension.

For what it's worth, since having my children I have only left my employer due to redundancy or likelihood of redundancy. My non-parent colleagues have turned over at a much higher rate. Employers recognise that a well treated, grateful employee can be far more loyal and long serving, therefore making it worthwhile funding these types of benefit. Why else would employers offer 'return to work' bonuses? It is often cheaper to pay the benefit to those few who take it up than to replace disgruntled leavers.

chickpea

It's to do with maternity rights - you shouldn't lose anything *financial* that you're contractually entitled to just because you are on maternity leave. So you would still get a performance bonus or holiday pay - but not necessarily a company car or gym membership or whatever.

It is a new thing though, being entitled to vouchers on maternity leave - quite a perk really - provided your employer actually pays out!

Obviously, OP's employer has decided this extra cost means the scheme is no longer viable at all, which is obviously a pity for all round - but I think employers' hands may be bound by legislation.

Obviously, a big company or civil service dept can absorb this extra cost, but slightly different for a small business.

BabyElephant

pinkshoes wrote: »

I've also just started getting childcare vouchers as I've just returned to work, but don't understand why a company would have to pay them to you when you're on maternity leave, as they're not a benefit, they're something you buy before tax.

Someone please explain?!?!

In my case they are a benefit which is provided under a salary scarifice arrangement and as such should continue to be provided to me whilst I am on maternity leave. If I had a company car, mobile phone etc then that should continue to be made available to me too. Holidays should also continue to acrue during maternity leave.

In addition if you agree to a salary sacrifice arrangement your SMP is calculated on the reduced salary that you receive, not your gross salary BEFORE the salary sacrifice took place. Therefore I will receive reduced SMP for the first 6 weeks compared to if I had not entered this arrangement.

Since the agreement is a "salary sacrifice" and SMP (and other statutory payments come under this as well I believe like SSP) is not salary they cannot take the value of the vouchers from the SMP but they still have to continue to provide the benefit.

Does that make sense? There's more info here http://www.hmrc.gov.uk/employers/sml-salary-sacrifice.pdf

I say in my case because for some people receving the vouchers it's different, they have them in addition to salary or they get occupational maternity pay which changes things.