Maternity leave and childcare vouchers/pension

Giggidy

Hi

I will be going on maternity leave in a few months and just wanted to have my ducks in a row for when I have a final chat with HR about a few things. Firstly, during a brief chat with said HR last week they said I wont be getting any childcare vouchers as I will be on SMP so there isnt any salary to deduct them from. I took that with a pinch of salt because in the same breath they also said no tax or NI gets deducted from SMP, which I know is nonsense as it was deducted the first time I was on maternity elsewhere.

I read somewhere that your employer have to pay this on your behalf, but its not clear on the voucher provider's website (Edenred) and the same goes for your pension. Are employers who offer this scheme obligated to pay both these on my behalf and not deduct from my SMP or is this discretionary? I just have to say the HR person is related to the boss and at times it seems like they just winging it, so I want to make sure Im not going to be fobbed off.

Takeaway_Addict

Giggidy wrote: »

Hi

I will be going on maternity leave in a few months and just wanted to have my ducks in a row for when I have a final chat with HR about a few things. Firstly, during a brief chat with said HR last week they said I wont be getting any childcare vouchers as I will be on SMP so there isnt any salary to deduct them from. I took that with a pinch of salt because in the same breath they also said no tax or NI gets deducted from SMP, which I know is nonsense as it was deducted the first time I was on maternity elsewhere.

I read somewhere that your employer have to pay this on your behalf, but its not clear on the voucher provider's website (Edenred) and the same goes for your pension. Are employers who offer this scheme obligated to pay both these on my behalf and not deduct from my SMP or is this discretionary? I just have to say the HR person is related to the boss and at times it seems like they just winging it, so I want to make sure Im not going to be fobbed off.

Childcare vouchers I believe are seen as a benefit and as such you are entitled to them...which is why the scheme failed miserably and the government had to introduce their own one!

I do not know about the pension

benebabe

They can't deduct from a statutory entitlement and as long as you are still paying for vouchers prior to SMP, they shouldn't be putting you at detriment just because you 'happen to be on maternity leave' (effectively) so you should still get your vouchers but they should be maintained on your behalf. I doubt the HR person knows what they're talking about.

Savvy_Sue

I agree about the childcare vouchers: it's one reason we've NOT offered them at work because we would have to carry on paying for them even when people have the next baby.

However I think they may well be right about the pension: they are not obliged to continue to pay that. We looked into it and concluded that we could base pension payments on SMP but would not do so. In support of that, our payroll bureau defaulted to calculating the employer contribution on the SMP rather than on the normal salary, until we asked them to go back to the original.

Darksparkle

Your employer could be right about tax/NIC.

SMP isn't high enough to pay NIC. Tax would depend on your pay to date, some people actually get a tax rebate during SMP.

Savvy_Sue

Darksparkle wrote: »

Your employer could be right about tax/NIC.

SMP isn't high enough to pay NIC. Tax would depend on your pay to date, some people actually get a tax rebate during SMP.

Initially yes, the OP almost certainly will get a tax rebate, but unless she is very low paid she will definitely be paying tax at the end of it!

And the employer should know that SMP is a taxable benefit.

Darksparkle

Savvy_Sue wrote: »

Initially yes, the OP almost certainly will get a tax rebate, but unless she is very low paid she will definitely be paying tax at the end of it!

And the employer should know that SMP is a taxable benefit.

Possibly, it would just depend on how the dates fell.

I done a calc for someone recently who would get SMP for a few months of this year and a few months of next and the wouldn't pay tax in the months they were on SMP.

If in the next tax year, the personal allowance would be split into £916.67 pm. SMP is only about £600 pm

It depends exactly on what this employer has said, they may have done the same calculation for the OP so know that no tax would be paid rather than saying it isn't taxable which is entirely different.

Giggidy

No tax calculations have been done for me, HR just believes that SMP is not taxable. With regards to the vouchers, could they say that are not obliged to pay it or is this definitely statutory?

chrisbur

http://vouchers.employersforchildcare.org/media/Childcare%20vouchers%20during%20maternity%20leave%20(parents).pdf

redpete

benebabe wrote: »

They can't deduct from a statutory entitlement and as long as you are still paying for vouchers prior to SMP, they shouldn't be putting you at detriment just because you 'happen to be on maternity leave' (effectively) so you should still get your vouchers but they should be maintained on your behalf. I doubt the HR person knows what they're talking about.

Am I understanding this correctly?

When an employee returns to work with a young family they can buy childcare vouchers from their pre-tax income, helping them return to work.

If that employee then takes another break from work for more children the employer has an obligation to provide the same childcare vouchers yet now the employer pays for them.

Oh my!

Giggidy

Just found this on HMRC's website in the Employer Helpbook....

"National Minimum Wage and statutory payments

If you offer a childcare benefit or childcare vouchers to your employees in return for a reduction in their cash pay, they cannot sacrifice their cash pay below the NMW rates. Nor can you reduce any statutory pay, for example Statutory Maternity Pay (SMP), or Statutory Sick Pay (SSP) for any form of employer supported childcare provided by you for the same period.

Childcare vouchers are an employer provided non-cash benefit. Employer provided benefits provided under a contract of employment must continue to be provided whilst an employee is absent from work on maternity leave. This applies even if the employee is getting no pay or only getting SMP."