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* Employees are able to avail childcare vouchers to any registered childminder or nursery in addition to after-school and summer camps for children who are up to the age of 16.
* Vouchers are returned, but they can’t transfer between companies.
* Both parents working are entitled to vouchers for childcare.
Childcare vouchers are an extremely popular benefit, and employers have to be aware of the most important information regarding the program, according to Jennifer Paterson
Childcare vouchers are among the most commonly-used benefits employers provide their employees and, as childcare costs are increasing, they’re likely to be among the most sought-after benefits.
A thorough communications plan that explains exactly how vouchers will be used is crucial for employees, which is why Employee Benefits has uncovered solutions to some of the employees the most frequently-asked questions regarding childcare vouchers that employers can incorporate into their plans.
1. Which are tax benefits?
Childcare vouchers are not subject to taxes on income and National Insurance (NI) for a maximum of PS243 monthly for basic rate taxpayers. PS124 per month to higher-rate taxpayers , and PS97 per month for additional rate taxpayers.
Julian Foster, managing director at Computershare Voucher Services and a board member of the Childcare Voucher Providers Association (CVPA) said: “Basic-rate taxpayers can save around PS943 annually by using vouchers for childcare.”
Additionally, there are tax benefits for employers. Dally Purewal, product and quality manager at Co-operative Employee Benefits, says: “Employers make savings on contributions to NI on all vouchers purchased. For taxpayers with a basic rate that means savings of PS400 an year for each employee. If 100 workers are employed, that’s PS40,000 savings.”
Savings on taxes can be achieved by providing an incentive program for childcare for employees in an arrangement for salary sacrifice.
2. What are the best places to spend vouchers? used?
Childcare vouchers can be utilized to fund every nursery, childminder, or childminder who is registered with Ofsted The official body to inspect schools in England and its equivalent for schools in Northern Ireland, Scotland and Wales.
John Woodward, group chief executive of Busy Bees Employee Benefits, states: “Most parents have a basic grasp of Ofsted registration and the ranking.”
Iain McMath, managing director at Sodexo Motivation Solutions, says: “We have more than 35,000 registered childminders in our system. If parents are uncertain they can get in touch with their childminder’s provider to confirm that they are registered with their childminder.”
The vouchers can also be used to accumulate according to McMath. “Childcare vouchers are a great way to use them to cover school holidays, so even if your staff aren’t taking advantage of all the vouchers each week, they could be saved.” Many people think that childcare vouchers only cover infants and very young children However, they can be utilized for children of a certain age from 1 September , following the 15th birthday of a child or 16th birthday, if the child has a disability.
3. What is the minimum age for vouchers?
“People are aware that they can utilize it to provide nannies and nurseries however what they might not be aware of is that it can also be utilized for breakfast, after-school and summer holiday camps or even activity camps,” Computershare’s Foster. “It is also a great option as a backup or emergency childcare option.”
Laura Czapiewski, product manager childcare vouchers at Edenred She says “Any child care provided in a school that is not during school hours can be paid for with vouchers.”
But, around 90 percent of vouchers are used for children under five. Busy Bees’ Woodward says: “It has been a natural process. Employees who have used vouchers for children who are under five know the concept, and as their children grow older, their knowledge is passed on. The people who aren’t benefiting is parents who have 10 and 12-year-olds that didn’t make use of vouchers while their children were at the nursery.”
4. Are vouchers resalable and do they expire? they returnable?
In general, there is no time limit for childcare vouchers. Employers are able to decide on whether they will refund the remaining remainder of vouchers that have not been used. Foster states: “Generally, since employees receive vouchers rather than receiving pay, a return of vouchers will need be made to their employer, and then through payroll. The majority of employers will allow it however, not all. Certain schemes are designed so that after you’ve made the decision to give up your pay, you can do it.”
HM Revenue and Customs says vouchers are only refunded in certain circumstances. Czapiewski suggests it is best practice to not provide refunds as a element of the scheme however, she adds “It is ultimately the decision of the employer.”
An employer is required to pay any balance remaining in the account of a voucher for an employee who leaves the organization as it is not able to be transferred between employers.
5. Are both parents able to take childcare vouchers?
A lot of people think that vouchers are only available to one parent working, however fathers and mothers can benefit from childcare benefits for as long as they’re working.
Sodexo’s McMath declares: “There is still a large assumption that it is only accessible to mothers. It’s not related towards the infant, however, instead to employees.”
Around 400,000 workers use vouchers for childcare every year, which means that employers have be able to address questions from employees about the program as they occur.
Study of a case: Sellafield enhances communications regarding vouchers for childcare
Nuclear reprocessing plant Sellafield has provided their 9,500 UK employees childcare vouchers over many years. However, it is constantly updating its messages to ensure that the worth of the offer is clearly understood.
The most frequently asked questions by employees include: Where can vouchers go? What kind of childcare services are included? What savings can staff earn based on their salaries? Do both parents have the right to vouchers?
Joanne Meloy, compensation and benefits advisor at Sellafield she states: “We have a real high percentage of female employees who use vouchers, and we are focusing on fathers.
“We have lots of parents who are from the same family as us, as we are the largest employer in West Cumbria.
“Communication involves telling them that both parents could benefit from the benefits.”
The Sellafield’s childcare voucher communication is displayed on the benefits page of its HR intranet website and includes hyperlinks to the company’s provider, Computershare Voucher Services.
The perk is also advertised to employees via travel shows as well as booklets and flyers as well as on posters displayed on the Sellafield’s noticeboards at work. The perk is also promoted in the company’s maternity guidelines and the family benefits booklet.
Case study: Vinci builds childcare voucher take-up
Construction company Vinci UK launched a communications campaign at the beginning of the year to update its employees’ understanding of the childcare voucher scheme.
The campaign, developed with Vinci’s partner, Computershare Voucher Services, included roadshows about benefits as well as posters, online slides and other materials in paternity and maternity leave packages.
The campaign content highlighted the wide range of childcare services that vouchers can be utilized.
Gemma Concannon, benefits manager at Vinci UK, says: “People tend to have the perception that vouchers only apply to nursery schools. They are able to be used to fund a variety of childcare options, like after-school clubs and we were keen to get the word out.”
In the first two weeks after the communication campaign, employer voucher use increased by 7%.
Concannon states: “The vouchers are a method for people to boost their earnings at home. It’s a very sensible idea to take.”
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