Recently, with the childcare voucher scheme closing to new entrants from April 2018, we’ve had a few calls from parents asking how maternity leave / shared parental leave affects childcare vouchers.
A main area of confusion is the need to receive a voucher in every rolling 12-month period in order to remain eligible for childcare vouchers.
Depending on your employer’s scheme rules, this may mean you can’t take the full 12 months maternity leave if you want to remain on the scheme.
A possible way around this is to ask your employer if they’re willing to fund a childcare voucher as part of a ‘Keep in touch’ day during your maternity leave. This can be for the minimum amount - with Computershare it’s £20.
If you become ineligible for childcare vouchers after April 2018 then Tax-Free Childcare (TFC) will be your only option, assuming you’re eligible. (You won’t be able to re-join your employer’s childcare voucher scheme as it will have closed to new entrants.)
(Shared parental leave (SPL) is unlikely to be affected in the same way as maternity leave as the SPL will be split into two parts.)
Here are answers to other baby-related questions we get asked on a regular basis:
As this is your first baby you can’t apply until the child is born.
You can register for childcare vouchers once the baby is born, providing this is before the childcare voucher scheme closes to new entrants in April 2018.
You can then place an ‘advance order’ order up to 12 months in advance, for when you return to work or have a paid ‘keep in touch day’ during your maternity leave / shared parental leave. With Computershare, this ‘advance order’ can be for as little as £20.
Your partner, if you have one, can also register for childcare vouchers as soon as your child is born, providing their employer runs a childcare voucher scheme too.
If your child is due after April 2018 then Tax-Free Childcare (TFC) will be your only option (assuming you’re eligible) as your employer’s childcare voucher scheme will have closed to new entrants.
Since this isn’t your first child, you and your partner can apply for childcare vouchers today.
Childcare vouchers can be stored in your electronic childcare account to be used as and when you need them – for any child up to the age of 15, and for any registered carer. Many parents build up an account balance before they start using registered childcare.
As long as you register for childcare vouchers prior to April 2018 (when the scheme closes to new entrants) and place an order in every rolling 12-month period, you and your partner will remain eligible for childcare vouchers.
If you don’t register on your employer’s childcare voucher scheme before April 2018 then Tax-Free Childcare (TFC) will be your only option (assuming you’re eligible) as your employer’s childcare voucher scheme will have closed to new entrants.
The short answer is ‘yes’ but it’s best to check with your employer as their scheme rules can vary and this could impact your eligibility.
- If you’re on an enhanced maternity leave / shared parental leave package, there may be sufficient funds to continue paying for the childcare vouchers from your salary
- If you’re on Statutory Maternity Pay (SMP) or Statutory Shared Parental Pay (ShPP), many employers will continue to pay for your childcare vouchers - you’re not allowed to salary sacrifice your SMP or ShPP for a childcare voucher. But some employers may ask you to stop your order.
Yes, but you need to ensure that you both place at least one order for vouchers in every rolling 12-month period to remain eligible for the childcare voucher scheme. This can simply be for the minimum amount - with Computershare it’s £20.
There’s lot of eligibility criteria for TFC, so we recommend you use our Decision Tree to see if you (and your partner, if you have one) are eligible in the first instance.
Assuming you’re eligible for both schemes, and to give yourself the luxury of time, we recommend that you and your partner, if you have one, register for childcare vouchers before April 2018.
You can then take your time working out which scheme is best for you and your family - it’s important to remember that once you’ve joined the TFC scheme, you can’t switch to childcare vouchers at a later date. But you can switch from childcare vouchers to TFC, even after April 2018.
In March 2016 an Employment Appeal Tribunal ruled employers do not have to provide childcare vouchers during maternity leave when offered through salary sacrifice, providing this is covered in their scheme rules.
As a result some (but not all) employers updated their scheme rules to allow them to stop childcare vouchers during maternity leave, so it’s best to check with your employer as their scheme rules can vary.
Always remember your partner can receive vouchers whilst you are on maternity leave / shared parental leave, provided they’ve joined their employer’s scheme before April 2018.
For information about maternity pay / shared parental pay and leave visit the Money Advice Service.
For more information about Tax-Free Childcare visit www.giveyourselfachoice.com.
Still unsure about something? Feel free to ask a question in the comments and we’ll get right back to you!