If you have a balance of Childcare Vouchers when you are leaving your employer, it is your responsibility to check with your employer if these can be returned to you through your payroll.
The amount you can salary sacrifice — ie pay into — your Childcare Voucher account depends on your income tax rate:. If an employee wants to make changes to their sacrifice arrangement, their contract of employment must be altered with each change. However, if you can make a salary sacrifice from your salary over and above Statutory Maternity Pay, for example, company maternity pay, Keeping In Touch KIT day or holiday pay, you can continue to receive Childcare Vouchers.
If you have no earnings over and above SMP your Childcare Vouchers will stop, however you will still be considered to be a member of the Scheme provided you have made at least one payment into your account in any consecutive 52 week period. Yes, as long as you remain eligible see above. Wealth Management. Employees who choose to participate will, as a result, have lower pay and therefore tax and National Insurance NI costs for the employer and the employee are lower.
For example:. The childcare voucher scheme is now closed to new entrants. However, most people already receiving childcare vouchers will still be able to do so and the Tax Free Childcare TFC Scheme has been introduced for anyone else.
Other family members and employers can also contribute to the account, should they wish. If you would like further guidance or information please do not hesitate to get in touch on or Back to News and Events. Your entitlement to contribution-based benefits is related to the amount of NICs you have paid, or are deemed to have paid.
Reducing your cash pay through a salary sacrifice may reduce the amount of earnings on which you pay NICs to below the LEL, so that you are no longer paying or deemed to be paying NICs. Even if your earnings remain above the LEL, because you are paying or deemed to be paying less NICs, this may reduce your entitlement to contribution-based benefits.
Contribution-based benefits include:. If this happens, you may be entitled to Income Support based on incapacity, which is a means-tested benefit. If this happens, you may still be able to claim JSA incomebased , which is a means-tested benefit. You should also consider if your State Second Pension could be affected. This is covered under earnings-related benefits. If your cash earnings are reduced to less than the LEL your entitlement to earnings-related benefits will be reduced. Earnings-related benefits include:.
If your salary sacrifice brings your pay to less than the LEL your entitlement to the State Second Pension will be reduced. Work-related payments are paid by your employer and are based on your average earnings over a fixed period before you begin to receive them. Sacrificed cash pay will not count as part of your average earnings for calculating these payments, so they may be reduced as a result of a salary sacrifice.
Work-related payments include:. If this happens you may still be entitled to Maternity Allowance MA , which is an earnings related benefit.
Even if you are still entitled to SMP, the higher rate, which you can receive during the first six weeks of maternity pay, will decrease, as it is based on the amount of your cash earnings. If this happens you may still be entitled to Income Support based on incapacity or Incapacity Benefit, if you meet the qualifying conditions.
These will be paid at a rate less than the normal rate of SSP. Whether you can receive a salary alternative to vouchers you have accrued will depend on the conditions of the scheme determined by your employer in the agreement you signed up to. Please consult those conditions and discuss them with your employer if necessary. However, as Childcare Vouchers can be used for out of school and holiday clubs for children up to the age of 15, you may well be able to get further use of any vouchers you have built up.
If you receive the childcare element of working tax credits, which provides specific support related to childcare costs, this will in most cases be affected, as the value of Childcare Vouchers you receive will reduce the value of the qualifying childcare costs you can claim in tax credits. This is something you should speak to your employer about. There is an expiry date printed on paper Childcare Vouchers, this is for internal auditing purposes only. Parents can always use their vouchers beyond this date to pay for approved childcare and Edenred will always honour such vouchers.
Electronic Childcare Vouchers do not expire; however, your employer may have additional conditions on usage if you leave their employment. Joining a salary sacrifice scheme to receive Childcare Vouchers reduces your cash pay and the level of income tax and National Insurance Contributions NICs. As your entitlement to some statutory benefits is based on the amount you earn and your NICs, your current or future entitlement to contributions-based, earnings related or income-related benefits may be affected.
The effect on non-statutory benefits is determined by your employer or benefit provider and depends on whether they calculate the benefit using your new, reduced salary or use a notional pre sacrifice figure for the calculations.
Childcare Provider. About Us. Contact Us. Frequently Asked Questions. What are Childcare Vouchers? This will include: Basic salary Taxable benefits Car allowance Guaranteed bonuses Shift allowances Commission Discretionary and performance related bonuses are not included in this assessment.
I already receive Childcare Vouchers; do I need to do anything? You can continue to receive the vouchers for as long as: You have not previously made a successful application for Tax-Free Childcare You remain with the same employer Your child is still eligible You have had at least one wage adjustment and received vouchers within any 12 month period 4.
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