Effects on benefits and pensions

Before taking childcare vouchers parents may wish to investigate the possible impact on the following:

Pensions
Most pension providers accept childcare vouchers as notional pay, at no detriment to pension contributions. However, parents should check with their employer who can verify the view of their pension provider.

Working Tax Credit
Working Tax Credit may be affected by taking vouchers. As each case is individual we advise parents to contact the Tax Credits helpline on 0845 300 3900 prior to applying for childcare vouchers. Alternatively, there is an HM Revenue & Customs WTC calculator available on HM Revenue & Customs website.

Statutory Maternity Pay and Statutory Paternity Pay
Statutory Maternity Pay may be reduced by taking childcare vouchers as it is calculated by salary, on which NI is payable. For this reason we advise employees to consider coming off the scheme 23 weeks before their baby is due. Statutory Paternity Pay is not affected by taking vouchers.

Overtime payments
Most employers accept childcare vouchers as pay when calculating overtime, so parents’ overtime payments should not be affected by taking childcare vouchers. However, parents should check with their employers.