As part of BSU’s employee benefits package, you can now enjoy savings on the cost of childcare by taking part in our childcare voucher scheme.
The scheme works through a salary sacrifice arrangement, which means that you give up part of your salary in exchange for receiving an equal amount in childcare vouchers.
You are allowed to receive childcare vouchers up to £55 per week, or £243 per month. Unlike your salary, you don’t pay any tax or national insurance on childcare vouchers. The saving in tax and national insurance is worth up to £903 a year for basic rate tax-payers, or £1,196 for higher-rate tax payers, which is effectively a net pay rise for parents. If your spouse or partner (this includes same sex partner) is also employed by BSU, then you may both join the scheme, saving families up to £2,392 a year in childcare costs.
Childcare vouchers can be used for a wide range of childcare, including nurseries, playgroups, pre-school, after-school care, play schemes, holiday clubs, nannies and au-pairs. However, the childcare provider must be registered or approved by an appropriate authority, such as Ofsted.
The first date on which childcare vouchers will be available is 21st March 2011. If you wish to benefit from vouchers from the 21st March 2011, then you must register with KiddiVouchers Ltd (the childcare voucher provider) by the last day of February 2011.
You can register online at www.kiddivouchers.com by selecting the 'Join my employers scheme' option, or alternatively by phoning 0845 094 1412, and providing the following details:
- The scheme reference number is available from Human Resources/Payroll
- Your BSU User ID
- Details of your children and contact details of your childcare provider
- The amount of childcare vouchers you wish to receive each month
Although you can join the scheme at any time, due to Inland Revenue rules you can normally only leave the scheme or change your voucher amount at the end of 12 months or as a result of change in circumstances as detailed in the policy.
The provider we have selected, KiddiVouchers Ltd, has recently been renamed Wider Plan Ltd, to reflect their expansion into a wider range of products and services. The change of name will have no effect on the operation of the childcare voucher scheme, which will continue under the brand name of KiddiVouchers. March 2011.
Information for Employees
Childcare Voucher Policy
- Scope of Policy
- Rules of the scheme
Introduction & Aims
Bath Spa University is committed both to issues of equality of opportunity and to providing practices that are family friendly.
Childcare vouchers offer staff the opportunity to purchase vouchers using the salary sacrifice method which they can use to pay for any child care. As the cost of the vouchers is deducted by the employer prior to any other statutory deductions this method gives the advantage of reducing the employee’s Tax and National Insurance contributions.
This policy aims to balance the needs of the individual with the operational needs of the organisation.
Scope of Policy
The Policy applies to all employees, across all grades and groups including academic and professional services staff, fixed term and part time hourly paid lecturers, part time and full time, permanent and temporary staff.
Childcare vouchers have been introduced on a trial basis and this policy and their continued availability will be reviewed in January 2013.
- To register their interest with the childcare voucher provider by no later than the last day of the month preceding that in which they wish to receive their first childcare vouchers.
- To enter into a salary sacrifice agreement which will act as a variation to the contract of employment.
- Provide honest and accurate information. Please note that if found to be acting fraudulently childcare scheme membership will be revoked and disciplinary action may be taken. In addition there will be a liability for any tax and national insurance arising out of a false claim.
- To ensure they fully understand the scheme when registering and to obtain advice from the childcare voucher provider on any aspects that require clarification
- Use the childcare vouchers to pay for the care of an eligible child in accordance with the Bath Spa University rules of the scheme and current legislative requirements. Please note it is against the rules of the scheme to accept cash or change from a childcare provider in respect of childcare vouchers.
- Advise the childcare voucher provider early in pregnancy to obtain individual guidance on the possible impact on statutory benefits.
- Maintain a record of employee’s gross pay, prior to childcare voucher salary sacrifice to ensure calculations of other benefits are correct.
- To make the appropriate deductions from the individuals gross pay in accordance with the statement provided by the childcare voucher provider.
- To advise the childcare vouchers provider of when any employee named on the statement does not have full or any entitlement to childcare vouchers due to a change in pay, such as when gross pay will drop below the National Minimum Wage or the Lower Earnings Limit (LEL).
- To comply with changes to HMRC legislation at the appropriate time.
- To notify HMRC of the participation of BSU in the scheme.
- To pay the invoice to the childcare voucher provider within the agreed terms to ensure childcare vouchers are delivered to employees on BSU pay dates.
- To provide Payroll with timely employee information about changes that affect pay, such as moving from full to half-pay when sick, or leaving part way through a month, to enable action to be taken prior to pay run.
- To support the childcare voucher provider in marketing the scheme.
- To act as a liaison point between BSU and childcare voucher provider in all aspects of the scheme not related to payroll deductions, payment of invoices and financial management.
- To update the policy in accordance with changes in legislation and to advise the trade unions and employee’s of any changes to the rules of the scheme.
Childcare Voucher Provider
- To ensure that employees are supported in making applications for childcare vouchers, by providing advice and guidance either via telephone or website.
- To provide a statement of registered employees to Payroll Services by no later than 3rd of the month.
- To provide a monthly invoice for payment.
- To release vouchers to employees on BSU pay date.
- Notify BSU of any changes that may affect the operation of the scheme and provide support to ensure that BSU complies with legislative change.
Rules of the scheme
To be eligible for the childcare voucher scheme you must:
- Be an employee of BSU.
- Have an eligible child, that is a:
- Child or step-child, who is maintained either fully or partially at your expense.
- Child who lives with the you, and for whom you have parental responsibility.
Childcare vouchers can be spent up to 1st September after the child’s 15th birthday (or if the child is disabled 1st September after their 16th birthday).
- Have sufficient salary. The following will have an impact on whether or not there is sufficient salary available to receive any or all of the amount of childcare vouchers requested:
- When salary is swapped for childcare vouchers the remaining salary must not fall below the National Minimum Wage (NMW). If this happens, BSU restrict the amount of childcare voucher to meet the NMW requirements.
- BSU will also override the voucher during periods of maternity, paternity, adoption and sick leave if the earnings are not sufficient to cover the requested voucher. Please note deductions cannot be made from statutory payments such as SMP, SPP, SAP or SSP.
- Entitlement to some state benefits may be affected if salary drops below the Lower Earning Limit (LEL). For example earnings-related benefits, such as statutory maternity pay, will be based on your reduced salary (i.e. your original salary less the value of your childcare vouchers). This means the amount of benefit you receive could be reduced. In order to prevent pay dropping below LEL, BSU will restrict the amount of childcare vouchers.
- Overtime payments will not be taken into account when calculating gross salary for the purposes of making deduction.
- All non-statutory employee benefits will be based on full notional salary. For example members of the Local Government Pension Scheme and the Teachers' Pension Scheme should note that pension deductions, such as attachment of earnings, charitable donations etc have been made.
- Salary deductions will be prioritised and the deduction for childcare vouchers will not be made until all other salary deductions, such as attachment of earnings, charitable donations etc have been made.
Commit to receiving your chosen childcare amount for a period of 12 months from registration, except in the circumstances set out below. You will only be allowed to change or cancel the voucher amount at the end of this period, by giving 23 days notice before the relevant payday.
Changes can be made in the following circumstances:
- Divorce or separation
- Death of a dependent
- Pregnancy or birth or adoption of a child
- Prolonged illness of a child
- Moving house
- Sabbatical or other unpaid leave
- Long-term sick leave or on returning from a long-term absence
- Significant change to contractual hours
- Significant change in partner’s circumstances
- Change in custody arrangements
- Child starting school
- Change in child’s entitlement to Government funding
- Change in entitlement to tax credit’s
- Significant change in childcare arrangements
- Leaving employment of BSU (please note any unused vouchers will remain in an individual’s account with the childcare voucher provider until the account balance is zero).
Please note that during periods of maternity leave it is possible to take a break from the childcare voucher scheme without actually leaving the scheme.
Employees may receive up to £243 per month (£55 per week) of childcare vouchers, free of tax and national insurance, provided registration has taken place with the childcare provider by 31st March 2011.
Higher rate tax payers who register after 31st March 2011 will only be able to receive up to £124 per month (£28 per week) of childcare vouchers, free of tax and national insurance.
From 6th April 2011 earnings will be estimated at the time of joining the scheme and at the start of each tax year and eligibility will be calculated at that point. If an employee’s earnings change during the tax year, the childcare vouchers will only be affected from the start of the next tax year.
Savings on tax and national insurance, the amount of saving will depend on the amount of childcare vouchers ordered and the amount of tax and national insurance normally paid. The childcare voucher provider will have a calculator to enable an individual savings calculation to be made.
Due to HMRC regulations, refunds will not be permitted unless:
- The childcare provider declines the vouchers, or
- They have not been used as a result of exceptional and unforeseen circumstances
BSU will require evidence that (1) or (2) have occurred and it will be at the discretion of the Director of Human Resources or the Head of Finance as to whether employer agreement will be given.
Access to childcare vouchers already claimed will remain until the account balance is zero.
The full amount of childcare vouchers can be claimed in the final pay period, subject to there being sufficient pay to cover the voucher, in which case the amount will be restricted.
If BSU decides to no longer participate in a childcare voucher scheme, existing salary sacrifice agreements will continue until their expiry date. After which the salary sacrifice will not be renewed
If BSU decides to transfer to a new provider of childcare vouchers, existing salary sacrifice agreements will continue until their expiry date. After which, employee’s will be able to choose to cease their agreement or to move onto the changed scheme.
Employees who currently participate in the Oak Tree Day Nursery salary sacrifice scheme cannot also receive childcare vouchers from the childcare voucher provider. For more information on this scheme please contact the Oak Tree Day Nursery Manager.