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Childcare vouchers and maternity leave
Do you provide a scheme for your staff to purchase childcare vouchers using a salary sacrifice scheme? If so, you are likely to be very interested to hear the outcome of a recent case of an employer who suspended the scheme when its employees were on maternity leave.

The employee complained that the terms of the scheme were discriminatory as it meant that the benefit would be suspended whilst she was on maternity leave. HMRC guidance had been that contractual non-cash benefits provided under a salary sacrifice scheme must continue to be provided during ordinary maternity leave, and the employment tribunal agreed with the employee.

However, on appeal this decision was overturned. The Employment Appeal Tribunal Judge held that the vouchers did in fact represent part of salary since pay had been substituted with vouchers under a salary sacrifice scheme. On this basis they were to be regarded as remuneration and could be discontinued during maternity leave. Employers are therefore advised to check the terms of their specific schemes to see if this new ruling will stop them having to pay for the vouchers during an employee’s maternity leave.
Posted on 19 Nov 2016


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