Manage your Childcare Voucher account carefully

We’re reminding all parents of the importance of managing your Childcare Voucher account carefully – whether that’s ensuring you can remain eligible for the scheme, getting the most out of  your savings, or taking care not to build up a balance you don’t anticipate needing to pay for childcare.

Stay eligible for Childcare Vouchers

Under the rules of the Childcare Voucher scheme, you must make at least one salary sacrifice payment into your Childcare Voucher account in each 52 week period to remain eligible.  The money must actually come out of your salary – it’s not enough simply to request a payment through your employer. This can be a particular issue for parents returning to work after a period of maternity leave, who may find they are no longer eligible for Childcare Vouchers if they have left it too late to restart payments into their account.

Basic Rate Taxpayers can sacrifice a maximum of £243 into your Childcare Voucher account each month. If you are sacrificing less than this, then it is worth checking if you should increase your payments – enabling you to save more on your registered childcare costs. You can speak to one of our Family Benefits Advisors on 028 9267 8200 to find out if this is the right option for you.

Don’t salary sacrifice more than you need

Equally, parents are encouraged not to build up a balance of Childcare Vouchers if you don’t anticipate needing them to pay for registered childcare – though many parents do save up additional Childcare Vouchers to help with paying for more childcare during school holidays.

Remember a Childcare Voucher account is not a bank or savings account – once you have sacrificed your salary through payroll, the money becomes Childcare Vouchers – it is no longer ‘salary’ or ‘cash’ and HMRC rules are clear that Childcare Vouchers can only be used to pay for registered childcare. In exceptional circumstances, it may be possible to receive a reimbursement of Childcare Vouchers through your employer’s payroll, however this is a contractual agreement and is entirely at the discretion of your employer.

It is your responsibility as an employee to manage your Childcare Voucher account carefully and not to salary sacrifice more than you plan to use to pay for registered childcare.

Leaving your employer?

If you are leaving your employer, you will no longer be eligible to pay into your Childcare Voucher account even if your new employer offers the scheme to employees. If you have a balance of Childcare Vouchers in your account that you don’t anticipate being able to use for childcare, it is your responsibility to ensure you request a reimbursement prior to leaving your current employment. Speak to your employer as soon as possible but remember, this is a contractual agreement and is at the discretion of your employer.

Find out more

This information is set out in the ‘Employee Guide to Salary Sacrifice’ – also known as the ‘Scheme Rules’ – which is available to download from our website here.

If you have any questions call our Customer Service team on 028 9267 8200.