Childcare Vouchers For Those On or Close to Minimum Wage

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logie48
logie48 Posts: 98 Forumite
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in Benefits & tax credits
Hi,


I have a dilemma which I think is crazy given the whole principle of the childcare vouchers scheme.


My partner is working where she has a few salary sacrifice schemes coming off, i.e. pension, saving schemes, etc.


However, we recently applied for childcare vouchers and her employer has stated that she cannot get the full allowance as it would take her below the minimum wage. I find this absurd, as surely the scheme is in place to help those who are worse off. What this is saying, is if you are on minimum wage then you are not entitled to the tax benefits which come with childcare vouchers?


Surely this cannot be correct. Any help would be appreciated.
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  • Caz3121
    Caz3121 Posts: 15,545 Forumite
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    logie48 wrote: »
    Surely this cannot be correct. Any help would be appreciated.

    the official .gov site confirms this is correct
    A salary sacrifice arrangement can’t reduce an employee’s cash earnings below the National Minimum Wage rates.
    https://www.gov.uk/guidance/salary-sacrifice-and-the-effects-on-paye
  • logie48
    logie48 Posts: 98 Forumite
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    Seems unfair to me.

    Those on higher earnings get the tax saving benefit, whilst those on lesser earnings loose out.

    Surely there must be something in place to combat this?
  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
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    How much does she earn?

    Do you not qualify for tax free childcare?
  • logie48
    logie48 Posts: 98 Forumite
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    I don't know exactly. She can get £100 of childcare vouchers, but the rest we need comes off and is taxed.

    I'm maybe being lazy, I need to look at tax free childcare if it is a possibility, or other childcare options.
  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
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    There's also tax credits if your household income is low
  • logie48
    logie48 Posts: 98 Forumite
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    We won't be eligible for that as my salary is well above the threshold.

    Thanks for your help.
  • marliepanda
    marliepanda Posts: 7,186 Forumite
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    logie48 wrote: »
    We won't be eligible for that as my salary is well above the threshold.

    Thanks for your help.

    Can you claim childcare vouchers from your employer?

    She is choosing to use perks such as 'savings scheme etc' so, cake, eat it, etc...
  • logie48
    logie48 Posts: 98 Forumite
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    Yeah I already max my childcare allowance out, but we require additional money from my partners allowance to top up.

    I know she gets additional benefits which come under salary sacrifice, exacerbating the problem, however what about someone who is on minimum wage. I know some may be eligible for tax credits, but for us we are not.
  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
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    logie48 wrote: »
    Yeah I already max my childcare allowance out, but we require additional money from my partners allowance to top up.

    I know she gets additional benefits which come under salary sacrifice, exacerbating the problem, however what about someone who is on minimum wage. I know some may be eligible for tax credits, but for us we are not.

    But you are eligible for childcare vouchers so you are getting help.

    As already mentioned there is a lot of help available, tax credits, childcare vouchers, tax free childcare, free childcare for 3-4 year olds. It just depends on your circumstances as to what help is best.. Personally I think people should be grateful for any help available, rather than always wanting more, I know I certainly am.
  • marliepanda
    marliepanda Posts: 7,186 Forumite
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    logie48 wrote: »
    Yeah I already max my childcare allowance out, but we require additional money from my partners allowance to top up.

    I know she gets additional benefits which come under salary sacrifice, exacerbating the problem, however what about someone who is on minimum wage. I know some may be eligible for tax credits, but for us we are not.

    So you are getting lots of help whilst complaining you can’t get more help.

    Don’t worry about other people, they’re getting on just fine...
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