Will Childcare Vouchers Affect My Statutory Maternity Or Paternity Pay?

Regulations in force for babies born after 5th October 2008 mean that you have 3 options in relation to your Childcare Vouchers whilst on Maternity Leave.

  • Option 1 – You can withdraw from the Childcare Voucher Scheme (this must be no later than 23 weeks before your baby is due). This will ensure that your SMP calculations are based on your higher salary (not including your salary sacrifice deductions). If you withdraw from the Scheme your Childcare Vouchers would cease from this date.
  • Option 2- You can remain in the Childcare Voucher Scheme during Maternity Leave. Your SMP will then be calculated at the lower rate (after salary sacrifice deductions). As your SMP is being calculated on your lower salary, no further deductions can be taken off SMP. Therefore whilst you are on Maternity leave and receiving SMP, your voucher costs will be covered by the company and you will continue to receive your Childcare Vouchers during this time.
  • Option 3- A woman may opt out of the childcare voucher scheme during the period which SMP is calculated. This is 8 weeks between approximately week 17 and week 25 of pregnancy. A woman could opt out during this period and then re-join the scheme after week 25 which means the company would cover her vouchers during her maternity leave and her SMP would not be affected.

Before making your decision, you should seek advice from any relevant agencies in relation to tax credit implications or ongoing childcare costs.

The obligation for the company to provide vouchers only occurs in respect of a woman who already has one qualifying child on the voucher scheme.

Category: Armed Forces, Civilian

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