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* Employees are able to avail childcare vouchers to any licensed nursery or childminder in addition to after-school and summer camps for children who are up to the age of 16.
* Vouchers are reimbursed, but they are not able to transfer between companies.
* Both parents working have the right to childcare vouchers.
Childcare vouchers are a very popular incentive, and so employers need to know the essential facts regarding the program, according to Jennifer Paterson
Childcare vouchers are among the most commonly-used benefits employers can offer their workers and, as childcare costs are increasing, they’re likely to be among the most sought-after benefits.
A thorough communications plan that explains the specific ways vouchers can be used is essential for employees, which is why Employee Benefits has uncovered solutions to some of the employees frequently asked questions regarding childcare vouchers that employers can incorporate into their plans.
1. Are there tax benefits?
Childcare vouchers are not subject to the tax on earnings and also national insurance (NI) for a maximum of PS243 per month for basic rate tax payers. PS124 per month to higher-rate taxpayers , and PS97 each month for additional-rate taxpayers.
Julian Foster, managing director at Computershare Voucher Services and a board member of the Childcare Voucher Providers Association (CVPA) and says: “Basic-rate taxpayers can save around PS943 per year by purchasing 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. In the case of 100 people, that’s PS40,000 of savings.”
The tax savings could be derived through an incentive program for childcare to employees as part of the salary sacrifice plan.
2. What are the best places to spend vouchers? used?
Childcare vouchers can be utilized to pay for all nursery or nanny, or childminder registered with Ofsted The official body for examining schools in England and its counterparts to the equivalent in Northern Ireland, Scotland and Wales.
John Woodward, group chief executive of Busy Bees Employee Benefits, states: “Most parents have a decent knowledge of Ofsted registration and the ranking.”
Iain McMath, managing director at Sodexo Motivation Solutions, says: “We have more than 35,000 registered childminders registered on our system. If parents are unsure they can get in touch with their provider to make sure 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 the staff isn’t taking advantage of all the vouchers each week, they could be stored up.” Many people think that childcare vouchers only cover infants and very young kids however, they can be used by older children for up to 1 September , following the 15th birthday of a child or 16th birthday, if the child has a disability.
3. What is the threshold for vouchers?
“People are aware that they can utilize it to provide nannies and nurseries However, what they may not be aware of is that it can also be utilized for breakfast, after-school and summer holiday camps or activity camps” Computershare’s Foster. “It could also be used to provide emergency or backup childcare.”
Laura Czapiewski, product manager childcare vouchers at Edenred Laura Czapiewski, Edenred’s product manager for childcare vouchers, states “Any childcare that is provided in a school during non-school hours can be paid for with vouchers.”
But, around 90 percent of vouchers are used to help children who are under the age of five. Busy Bees’ Woodward says: “It has been a natural progression. Employees who have used vouchers for their children under five understand the concept, and as their children get older, their knowledge is passed on. The people who aren’t benefiting include parents with 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 expiration date for childcare vouchers. Employers usually decide if they want they will refund the remaining remainder of vouchers that have not been used. Foster states: “Generally, since employees receive vouchers rather than being paid, any return of vouchers will need to be refunded through their employer as well as through payroll. The majority of employers will allow it but not all. Some plans are structured in a way that after you’ve made the decision to reduce your the salary, it’s done.”
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 since it isn’t transferred between employers.
5. Are both parents able to take childcare vouchers?
Many people believe that vouchers are just for one parent who is working, but parents and fathers are able to benefit from childcare benefits in the time 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, rather to an employee.”
More than 400,000 employees 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 facility Sellafield has provided the 9,500 UK employees with childcare vouchers for several years, however it is constantly updating its messages to ensure that the benefits is clearly understood.
The most frequently asked questions by employees include: Where can vouchers go? What kind of childcare services are provided? What savings can staff earn based on their salaries? Do both parents have the right to vouchers?
Joanne Meloy, compensation and benefits manager at Sellafield she states: “We have a real top of female employees that use vouchers, and we are focusing on fathers.
“We have many parents from the same family working for us, as we are the largest employer in West Cumbria.
“Communication involves making them aware that both parents will benefit from the benefits.”
The Sellafield’s childcare voucher communication is included in the benefits section of its intranet HR site as well as hyperlinks to the company’s provider, Computershare Voucher Services.
The benefits are also made known to employees via the childcare voucher roadshows brochures, flyers as well as on posters displayed on the Sellafield’s noticeboards at work. The benefit is also advertised in the company’s maternity guidelines and family benefits brochure.
Case study: Vinci builds childcare voucher take-up
Construction company Vinci UK launched a communications campaign in the beginning of this year to update its employees’ understanding of its childcare voucher program.
The campaign, which was created by Vinci’s partner, Computershare Voucher Services, included roadshows about benefits as well as posters, slides online as well as material for paternity and maternity leave packages.
Campaign content highlighted the range of childcare services that vouchers are able to be used.
Gemma Concannon, benefits manager at Vinci UK, says: “People tend to have the belief that vouchers are only for nursery schools. They are available to fund a variety of childcare services, including after-school clubs and we were keen to get the word out.”
In the initial couple of weeks following the campaign, vouchers for employers’ usage increased by 7 percent.
Concannon states: “The vouchers are a method for people to boost the amount they earn at home. It’s a sensible idea to take.”
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