Maternity Pay & Childcare Vouchers

Pure_Genius

rpc wrote: »

Salary sacrifice (and other deductions) can be taken from you enhanced maternity pay.

QUOTE]

I have to disagree

as you put it...straight from the horses mouth

As a newcomer i cannot hotlink yet, but this is directly from Businesslink.gov.uk advise for Employers on salary sacrifices & Maternity Leave



Salary sacrifice: an overview for employers


Salary sacrifice and non-cash benefits during maternity and adoption leave


When an employee is on statutory maternity or adoption leave, all of the terms and conditions of their employment contract continue to apply, other than those relating to wages or salary.

This applies to all non-cash benefits in the contract, including any that form part of a salary sacrifice arrangement. You must continue to provide these benefits in the same way as if the employee was still at work.

For example, if you agree a salary sacrifice arrangement that involves an employee losing £50 per week of their salary in return for £50 of vouchers, you will have to continue to provide those vouchers throughout any statutory maternity or adoption leave that the employee takes.

You cannot reduce the amount of any statutory payments due to the employee to recover the cost of providing any non-cash benefits to them while they are on maternity or adoption leave.

Please note that these provisions apply to childcare vouchers in exactly the same way as to any other non-cash benefits.

rpc

Pure_Genius wrote: »

You cannot reduce the amount of any statutory payments due to the employee to recover the cost of providing any non-cash benefits to them while they are on maternity or adoption leave.

Please note that these provisions apply to childcare vouchers in exactly the same way as to any other non-cash benefits.

It doesn't sound as though you are talking about statutory payments. You seem to be talking about contractual maternity pay. They are different.

Contractual maternity pay (e.g. Occupational Maternity Pay as in Example 4), however, is different. A salary sacrifice arrangement can reduce not just salary entitlement; depending on the terms of the contract, it can reduce also an employee’s entitlement to contractual maternity pay which is payable in excess of SMP.

While it is probably a little harsh to calculate maternity pay based on a reduced salary, and then take further reductions, it is not unlawful unless it takes you below SMP.

What makes you think you have been paid less than SMP?

Pure_Genius

The quotes stated apply directly to myself and I agree with both of them

Quote from Page 3 states that my salary sacrifice is taken into account before calculating my AWE, therefore my AWE is based on My Gross 1243-sacrifice 243 which equates to 1000 per month

this is correct and this is whats been done by payroll



Quote:
Originally Posted by Page 3
Therefore where a salary sacrifice arrangement is in place during the set period, the SMP average weekly earnings [AWE] calculation will be based on gross earnings subject to Class 1 NICs. Under that arrangement, the salary or wages will be payable at a reduced level; and any other remuneration chargeable to Class 1 NICs may also be changed. So any SMP due will be based on that lower salary and changed remuneration.

Quote 5 also applies to me

because my OMP has been calculated at the reduce earnings level, I have received less OMP than i would have done if i was not on a salary sacrifice scheme

My salary sacrifice has reduced my overall entitlement to higher OMP rates and again..I agree that tis is correct,


the problem......as previously stated, is that all these calculations have been correctly made, but They cannot DEDUCT Non-cash benefits from any pay i recieve when on statutory maternity LEAVE, NOT statutory maternity PAY
Quote:
Originally Posted by Page 5
No contractual agreements can exclude, limit or otherwise modify SMP payments due. Therefore any SMP payable must be paid in full and in cash, for up to 39 weeks, regardless of any contrary contractual arrangements. In particular, the SMP payable cannot be further reduced by the terms of a salary sacrifice arrangement.
Contractual maternity pay (e.g. Occupational Maternity Pay as in Example 4), however, is different. A salary sacrifice arrangement can reduce not just salary entitlement; depending on the terms of the contract, it can reduce also an employee’s entitlement to contractual maternity pay which is payable in excess of SMP.

onlyroz

Right I think I'm with you now. Your "half pay" has been calculated with the vouchers deducted, and then the vouchers have been deducted again. Is this right?

Pure_Genius

onlyroz wrote: »

Right I think I'm with you now. Your "half pay" has been calculated with the vouchers deducted, and then the vouchers have been deducted again. Is this right?

My FULL Pay / HALF pay etc has all been calculated after the deduction of 243 salary sacrifice for Childcare vouchers

Then when I have been paid at this reduced rate........ANOTHER £243 has been deducted

Therefore ONLYROZ....I think you understand it Exactly right

rpc

onlyroz wrote: »

Right I think I'm with you now. Your "half pay" has been calculated with the vouchers deducted, and then the vouchers have been deducted again. Is this right?

Which is a crap way of doing it, but is not unlawful unless it takes the pay below SMP.

Read your contract, read your work's maternity policy. If this method is your contracted one, your employer has followed it correctly and you have always received at least SMP then you are out of luck. We cannot advise on your work contract. If your employer has not followed their policy or your contract, then take it up with them or ACAS. Same if you have ever been paid less than SMP.

SMP will be calculated based on post-sacrifice salary. Contractual pay can also use this, or any other measure such as how many bananas you eat per week. Our company uses a slightly different measurement for contractual maternity pay which would give a better result in this situation.

They cannot DEDUCT Non-cash benefits from any pay i recieve when on statutory maternity LEAVE, NOT statutory maternity PAY

Yes they can, provided you are always paid at least SMP. The bit of my post your requoted explicity says that they can if your contract permits it. That's the whole point of contractual maternity pay - as long as statutory minimums are met, the contract governs what is payable and deductible.

Pure_Genius

RPC can you explain this from the direct.gov.uk website then please?

For example, if you agree a salary sacrifice arrangement that involves an employee losing £50 per week of their salary in return for £50 of vouchers, you will have to continue to provide those vouchers throughout any statutory maternity or adoption leave that the employee takes.

and this 1 from the same HMRC pdf sheet u attached earlier (page 8 of 26)

Providing contractual non-cash benefits during statutory maternity leave
[FONT=Arial,Arial][FONT=Arial,Arial]
As explained above contractual non-cash benefits may sometimes be provided under a salary sacrifice arrangement in lieu of sacrificed salary. During any Ordinary Maternity Leave [OML] (weeks 1 to 26) they must continue to be provided.

In future, following amendments made to Regulations in 2008, the period during which such benefits must continue to be provided is being extended. The contractual non-cash benefits must continue to be provided during any Additional Maternity Leave (weeks 27 to 52) as well as during any OML – regardless of any contrary contractual agreement between employer and employee and regardless of any salary sacrifice arrangement.
[/FONT][/FONT]

rpc

Those both say that the non-cash benefits must continue to be provided, which they have been. You cannot remove a non-cash benefit while someone is on OML or AML. It says nothing about not being allowed to deduct these from contractual pay if the contract permits. The "regardless" bit of the last sentence means that these benefits must be provided even when there is no pay that can be sacrificed. None of this applies you the period you are arguing about, it does apply to months 6-9 when you have to receive the vouchers with no deductions made.

I sympathise, but you are looking in the wrong place to try to fight your corner. For contractual benefits and contractual pay, you should be looking to your contract. The law only comes into it if deductions would take you below SMP levels.

What does your contract, or employers maternity leave policy, say on the matter? If what it says and what they have done are the same, then I'm afraid you are wasting your energy.

Pure_Genius

RPC I would agree 10000% with your last post IF the rates of my maternity pay had been calculated on my gross earnings of 1243, and not on the earnings on 1000

Effectively then, I'm 243 down per month due to salary sacrifice being taken into consideration in calculating my AWE in weeks 17-25
AND
I'm a further 243 down for first 6 months where they've deducted 243 per month from my maternity pay

Not only does that mean I've paid for 12 vouchers in 6 months, it means that the vouchers they SUPPLY for free during months 6-9 and 10-12 are simply the ones I've already paid for

That CANNOT be right.....SURELY especially when I sought advice from management before going on Mat Leave and being told categorically NOT to opt out if Voucher scheme from week 17 onwards!!

onlyroz

Pure_Genius wrote: »

RPC I would agree 10000% with your last post IF the rates of my maternity pay had been calculated on my gross earnings of 1243, and not on the earnings on 1000

Effectively then, I'm 243 down per month due to salary sacrifice being taken into consideration in calculating my AWE in weeks 17-25
AND
I'm a further 243 down for first 6 months where they've deducted 243 per month from my maternity pay

Not only does that mean I've paid for 12 vouchers in 6 months, it means that the vouchers they SUPPLY for free during months 6-9 and 10-12 are simply the ones I've already paid for

That CANNOT be right.....SURELY especially when I sought advice from management before going on Mat Leave and being told categorically NOT to opt out if Voucher scheme from week 17 onwards!!

What does your contract say about maternity pay? To be honest, you should think yourself very lucky if you're receving anything above SMP.