Implications for other benefits
Pension scheme contributions
If you are a member of one of the pension schemes offered by the University, your contributions are calculated before the salary reduction, so will not be affected.
State Second Pension
If you are not in one of the University´s pension schemes, and you are contracted in to the State Second Pension, participating in childcare vouchers may have an effect. This is because your State Second Pension is related to the amount of National Insurance you pay, and participating in childcare vouchers reduces the amount of National Insurance you pay. It is anticipated that the effect will be minimal, but if you have any queries or concerns about your State Second Pension, you should contact the Pensions Office.
Lower Earnings Limit
The Lower Earnings Limit is the level at which you become entitled for state benefits, such as Statutory Maternity Pay, Statutory Sick Pay and the State Pension. By taking childcare vouchers, you are reducing your salary which potentially could take you below the Lower Earnings Limit, and could therefore remove your entitlement to these benefits. The Lower Earnings Limit for the tax year 2009-2010 is £4,940 per annum, or £412 per month. So if your salary was £600 per month, and you took £243 of vouchers, this would reduce your monthly salary to £357, which is below the Lower Earnings Limit.
Edenred provides a savings calculator (see link to the right) which will show if the childcare vouchers you want to take would cause you to fall below the Lower Earnings Limit.
You should also be aware that if you are in one of the University´s other Pay Plus schemes, e.g. Pay Plus for pensions, these also reduce your salary.
National Minimum Wage
It is the University´s responsibility to ensure that all staff are paid above the National Minimum Wage. If participating in Pay Plus for childcare would cause your pay to fall below the National Minimum Wage level, you will not be able to claim all your childcare vouchers.
Working Tax Credits and Child Tax Credits
Taking childcare vouchers will have an effect on any Working Tax Credits or Child Tax Credits. Edenred offers an online calculator to help you decide if you would be better off taking childcare vouchers. This can be found from the link on the right, and the scheme ID is UNIV8326.
It is suggested that if you are claiming both childcare vouchers and Working Tax Credits or Child Tax Credits, you should inform your local tax office.