Childcare Vouchers - Small Print
The criteria which you must meet to qualify for Childcare Vouchers is minimal – the scheme really is as good as it sounds!
Working Parents are eligible
To take advantage of the scheme, you must be working and paying tax.
Self Employed and PAYE
Working Parents who are self-employed are unable to take part in a Childcare Voucher scheme, as you do not pay tax under PAYE.
Registered Employers
In order to request Childcare Vouchers, employers must operate the scheme. If your employer doesn't already offer a scheme, contact us with their details and we'll get in touch with them on your behalf.Minimum Wage
As a working parent, if you join a childcare voucher scheme, the deduction made from your salary (up to £243 a month, or £55 a week) which funds your Voucher must not take you below the national minimum wage level, currently set at £5.80 per hour for staff aged over 21 years, £4.83 per hour for employees aged between 18 and 20 and £3.57 per hour for those aged 16 and 17. The salary sacrifice arrangement under which you receive Childcare Vouchers as part of your pay reduces the amount of cash salary you receive. As the minimum wage is calculated on this cash amount, it is crucial that the total value of the Childcare Vouchers you receive under the arrangement does not reduce your hourly rate below the limit. This means that if you work different hours each week/month, the amount of Childcare Vouchers you wish to receive should be reconsidered each week/month to ensure that the amount you are paid stays above the minimum wage.
Carer Registration
To accept Childcare Vouchers, carers must be registered with Ofsted or the equivalent governing body. A registered childcarer is an individual or business that is solely concerned with the caring for children. The most common examples of this are nurseries, childminders, playgroups, crèches, out of school clubs, nannies and au pairs. Members of a child's family – unless they are a registered carer and look after other children – cannot accept Childcare Vouchers as payment.
Also note...
Statutory Maternity Pay
Working Parents SMP entitlement may be affected by taking Childcare Vouchers. This should be checked with your Employers HR department.
Statutory Paternity Pay
Working Parents SPP entitlement may be affected by taking Childcare Vouchers. This should be checked with your Employers HR department.
Working Tax Credits or Child Tax Credits (WTC/CTC).
Taking Childcare Vouchers as part of a salary sacrifice arrangement may affect the childcare element of your WTC or your CTC entitlement. For further information, please visit www.hmrc.gov.uk/childcare
Pensions
Provided you pay the minimum requirement for NI payments, taking Childcare Vouchers should not affect your basic state pension. However, it may have some effect on your second state pension, and you should check with your employers HR department or pension provider concerning personal or work related pension schemes.
Redundancy
Weekly pay is one of the factors used to calculate statutory redundancy payments. This will be impacted by reductions in cash pay in return for Childcare Vouchers. Therefore, the 'sacrificed' element of your salary does not have to be included by your employers when assessing your weekly pay for the purposes of a redundancy calculation. This could mean you are paid a lower redundancy payment if you are receiving Childcare Vouchers. If your employer provides an enhanced redundancy payment scheme then you should review the terms of the scheme to clarify whether the 'sacrificed' element of your salary will be taken into consideration when calculating your redundancy payment.
