Am I allowed to receive childcare vouchers, or any other benefits, whilst on maternity leave?
The simple answer is yes you are but you are also subject to any terms and conditions agreed with your employer.
You cannot have any deductions by way of a salary sacrifice from any statutory payments. You cannot salary sacrifice from statutory maternity or paternity pay. And this issue is not simply a childcare voucher issue, it applies to all benefits offered to you.
But you are allowed to have a deduction by way of salary sacrifice from any enhanced payments you receive, over and above the statutory payment. You can also receive childcare vouchers as a salary addition whilst on leave.
The broader issue is regarding the advice given to parents.
The first issue is that some parents would be better advised to come off vouchers some time before they go on leave to minimise the impact of the vouchers on their SMP. They would need to have a pay award in order to re-calculate the correct SMP.
Some parents would not want childcare vouchers whilst on leave anyway, they need living money!!
Remember that you can still bank your allowance for later in the tax year on your return to work but you cannot carry it forward into another tax year.
Benefit legislation, that has been in place for some time, does state that all employees that receive benefits, including vouchers, have the right to continue receiving them if they wish whilst on maternity leave, up to a period of 12 months. The period was extended from 6 months in 2008. It is also noted that companies must comply with any discrimination legislation as well.
There appears to be a section of the legislation that allows for employment contracts to override this, so an employee's contract would state that certain benefits would be excluded voluntarily during leave or absence periods.
As far as we are aware the advice coming from the legal profession, HMRC and other bodies, including childcare voucher scheme operators is varied.
Our interpretation is that it is perfectly legal to have a contractual clause that limits the benefits at times of leave, as long as it is not a compulsory clause. The timing of the contracts would be important.
HMRC themselves cover this topic in their salary sacrifice sheet, http://www.hmrc.gov.uk/employers/sml-salary-sacrifice.pdf
and it clearly states on page 11
'subject to the terms of the contract the employee may be able voluntarily to opt out of receiving the non-cash benefit under the salary sacrifice arrangement. However it is important to emphasise that the employer cannot compel the employee to opt out of receiving the benefit.'
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