If calling please ask for: Victoria Cooney Room 144

1st Floor

Direct line/ext: 0161 918 4293 Hospital Headquarters

Our ref: Childcare Vouchers North Manchester General Hospital

Delaunays Road

Crumpsall

Manchester

M8 5RB

Dear Parent

Thank you for your interest in the Childcare Voucher scheme, which is part of a government initiative to help working parents save money.

You can choose to take up to a maximum of £243 of your salary per month in childcare vouchers, which means you could save up to £100 per month in tax and National Insurance (NI) .

Please note; if both parents are employed by the Trust, then both employees can sign up for the voucher scheme which means you could double your household savings. However, separate application forms need to be completed.

The scheme will be managed by an external administrator, Edenred, who will set up your electronic voucher account for you to be able to pay your carer.

Please find enclosed your information pack, which contains everything you should need to make an informed choice as to whether the scheme will benefit you.

Once you have decided to join the scheme, enrolling is quick and easy and you can find the instructions on pages 6&7.

Employees must sign up by the final day in any given month in order that the salary sacrifice is taken the following month. Salary sacrifice will not be taken for part-months e.g. if your form is received by the 15th of the month.

When considering taking Childcare Vouchers please be aware that they can be used to pay any registered or approved childcare including nurseries, childminders, breakfast & after school clubs, holidays clubs, nannies and in some cases residential holiday care.

If you do have any further queries you can contact me on the above telephone number or by email, alternatively you may wish to ring the Edenredhelpline.

Yours sincerely

Victoria Cooney

Adult & Child Care Coordinator

Pennine Acute NHS Hospitals Trust

Improving Working Lives

CHILDCARE VOUCHERS – Questions and Answers

IMPORTANT PLEASE READ THESE CAREFULLY

  1. What is the scheme?

The Pennine Acute Hospitals NHS Trust has chosen to introduce a scheme which allows staff to take part of their salary in Childcare Vouchers, up to the value of £55 per week / £243 per month / £2,916 per annum (depending on the rate of tax you pay) as part of their remunerative package. This means that if you elect to accept Childcare Vouchers in exchange for the equivalent reduction in your salary you will not have to pay National Insurance contribution (NIC), Tax or Pension contributions on the vouchers.

Those who elect to join the scheme on or after the 6th April 2011 may have restrictions placed on the amount they can receive that is exempt from tax and NICs. Your employer will undertake a basic earnings assessment for each employee who elects to join after this date.

If this assessment shows you to be a higher rate taxpayer (as a guideline this is likely to be those earning over £45,391) you will only be able to receive tax and NIC exemption on £124 a month.

If this assessment shows you to be an additional rate taxpayer (as a guideline this is likely to be those earning over £152,916) you will only be able to receive tax and NIC exemption on £97 a month.

If you elected to join the scheme on or before the 5th April 2011, you will be able to receive £243 a month free of tax and NIC indefinitely.

The amount that you can receive free of tax and NIC is set at the start of the tax year in April or when you join the scheme. At the start of each tax year, all employees who joined the scheme on or after the 6th April will be reassessed and any changes in salary that occurred within the year will be taken into account,

The following tables demonstrate the available savings:

Basic Rate Taxpayer (20% tax *12% NI) / Parents who join the scheme after 6th April 2011
Weekly tax exempt amount / £55
Monthly tax exempt amount / £243
Annual tax exempt amount / £2,916
Savings / £933
HigherRate Taxpayer (40% tax *2% NI) / Parents who join the scheme after 6th April 2011
Weekly tax exempt amount / £28
Monthly tax exempt amount / £124
Annual tax exempt amount / £1,484
Savings / £623
AdditionalRate Taxpayer (50% tax *2% NI) / Parents who join the scheme after 6th April 2011
Weekly tax exempt amount / £22
Monthly tax exempt amount / £97
Annual tax exempt amount / £1,166
Savings / £606

(The figures shown are for tax year 2011/12)

*These are samples of potential savings. For an individual calculation based on your personal salary and childcare costs log on to and click on the Savings Calculators.

All figures quoted, however, exclude the pension scheme savings. Please note that your salary should not fall below thresholds for both the national minimum wage and statutory benefits as a result of taking Childcare Vouchers. Should your application result in this, we will contact you again to discuss this further with you.

  1. Can all staff benefit?

Childcare Vouchers are available to both male & female employees. It is anticipated that the majority of staff will benefit from choosing childcare vouchers. Consideration should however be given to any possible impact on tax credits, benefits and pension highlighted below.

3.How do Childcare Vouchers affect my entitlement to tax credits?

Entitlement to Child Tax credit, which is available to 90% of families with dependant children, is very unlikely to be adversely affected by Childcare Vouchers, as childcare costs are not a factor.

The impact on entitlement to the childcare elementof the Working Tax Credit, which provides specific support related to childcare costs would, in most cases be affected because HM Revenue and Customs considers that when you choose to take childcare vouchers as part of your salary then it is the employer who is paying for the childcare and not the parent. It is therefore more likely that continuing to claim for the childcare element of WTC will mean you will be better off not joining the childcare voucher scheme.

Further advice can be obtained by contacting the Tax Credits helpline on 0845 300 3900 or by visiting

Additionally, you can see for yourself if childcare vouchers are right for you by visiting and clicking on Savings Calculators, entering Scheme ID PENN3027 for the Tax Credit Estimator.

  1. In addition to my basic salary I also get extra duty payments. Will these be affected?

No. In calculating all other payments to you such as overtime or extra duty payments, your preserved pay will be used i.e. your new adjusted salary plus the value of the childcare vouchers, which should equate to your original basic salary.

5.What happens when there is a pay rise?

You will receive any relevant pay awards based on your preserved pay.

  1. I have more than one job with my current employer as I do regular “Bank Shifts” will this affect the amount of childcare vouchers I can order?

Your earnings figure should be calculated on your main employer earnings only.

  1. How will I receive the vouchers?

On payday, Edenred will credit your electronic childcare vouchers account with the value you have selected on your application form. You can access your account over the Internet or via the telephone to request payments to your childcare provider.

Payments can be set up to allow for a fixed amount each month to be paid directly to your childcare provider or set up to allow for you to dictate each month the amount to be paid, similar to a standing order.

  1. What happens if my childcare costs vary from month to month e.g. I only pay for childcare during the summer holidays?

You should calculate the total amount you are expecting to spend over the year on childcare and divide this by 12 to get the average monthly amount you are expecting to pay on childcare. This is an ideal way to spread the cost of childcare over the year and to ensure that you receive reduced NIC and tax contributions. As you are required to sign up for a twelve month period unless a ‘life changing event’ happens, you should base your calculation on making payments for the whole twelve months. Your payments simply remain in your on-line account until you use them as there is no expiry on electronic vouchers.

9.What type of childcare can I use childcare vouchers for?

Childcare vouchers are not just for babies and can be used to pay for the care of children up to the age of 15, or 16 if they are disabled, in Ofsted registered or approved care. Edenred will require copies of registration details from registered child carers. Typical examples include Childminders, Day Nurseries, Nannies, Out of School Clubs and Holiday Play schemes. Ask your childcare provider whether they are Ofsted registered, and whether they will accept the vouchers as a means of payment before signing up to the scheme. Nannies and au-pairs can be paid in vouchers if they are on the voluntary Ofsted register.

Please note that it is your responsibility to ensure that your provider is registered /approved and willing to accept childcare vouchers prior to entering the scheme.

10.What does my childcare provider have to do?

It is likely that your chosen carer(s) has been paid previously with Edenredvouchers and is therefore already affiliated to the network. Simply ask them for their EdenredAccount Number, which will begin with a ‘P’ and which you will need in order to request electronic payments.

If your carer has not been paid with Edenredvouchers before, they can complete a Childcare Provider Affiliation Request online by visiting and clicking on ‘Accept vouchers’ in the Childcare Providers’ area. If they do not have internet access you can download a form for them.

11.Can I use more than one childcare provider?

Yes. You have the freedom to change your childcare arrangements whilst you are in the scheme as long your chosen carer is registered or approved, and also affiliated with Edenred(i.e. they already have an Edenred Account Number). New or additional carers who are not already affiliated with Edenredsimply need to complete a Childcare Provider Affiliation Request.

12.Can I change my childcare arrangements whilst in the scheme?

Yes, although the replacement, or additional, provider will need to fill in a new Carer affiliation form (unless they already receive childcare vouchers from Edenred). The information pack you receive when you join will give you details of this.

  1. What if I were to leave the scheme or leave the employment of the Trust, could I get a refund on any vouchers already bought?

A refund would not be possible. Additionally it is a requirement of entering the scheme that any credit on your electronic account is used within three months of leaving.

14.Can I leave the scheme at any time?

Yes, but only if you experience a major life change, eg leaving the trust, or a child starting school or if you become pregnant. These are referred to as “life change” events. You can however, opt to join the scheme at any point in the year but are required to agree to taking vouchers for a minimum period of twelve months.

15.What happens if I go on Maternity Leave to have another baby?

Participation in the scheme whilst pregnant will affect payments made to you particularly in respect of half pay (please see section 12.2 of the Trust’s Maternity, Paternity & Adoption Leave Policy). Should you become pregnant this would be classed as a life changing event under the scheme and you should discuss this with the Child and Adult Care Co-ordinator on an individual basis.

  1. What happens if I go on long term sick leave, or take unpaid leave?

Whilst on full paid sick leave your salary will continue to be reduced by the value of your childcare vouchers. If your pay is reduced to half pay, this payment will be based on your adjusted salary. Should this occur, it would be classed as a life changing event and you would have the opportunity to opt out of the scheme.

  1. How will childcare vouchers affect my pension?

Your pension contributions will reduce, as they will be based on your adjusted salary. If you are a member of the NHS Pension Scheme, then the benefits are based on the best final salary you have received in the last three years prior to retirement. In the unlikely event of benefits becoming payable whilst you are in the scheme (e.g. you retire due to ill health or die) the benefits due may be reduced, depending on how long you had been in the scheme.However, once you no longer receive childcare vouchers and your full salary has been restored, pension contributions and future benefits would be based on the restored salary, provided you had received this salary for at least a year. If you are contributing to a Private Pension Scheme, you should discuss the possible effects with an independent financial advisor.

  1. Although I will be better off financially, my gross salary will be less. How will this affect my credit status e.g. applying for a mortgage?

In replying to credit reference checks we will inform companies of the situation with regard to your total remunerative package. On the grounds that you are actually better off under the scheme, common logic should mean that you would not be disadvantaged, however all lending companies are different and the Trust can make no guarantees on this issue.

  1. I am currently paying back a student loan, which is 9% on my earnings over £15k. Will this alter?

Yes, it will alter as the trigger point is based on the salary on which you are liable to pay NIC contributions. Under the childcare voucher scheme your total gross salary on which NIC is paid will reduce, hence your loan repayment will decrease.

20.Can I use the vouchers in the Trust’s onsite nurseries / partnership nurseries?

These vouchers can be used in the Trust’s on site nurseries, however, the Trust has introduced the Nursery Salary Sacrifice Scheme for Tall Trees Day Nursery which is operated by the Trust. By joining the Nursery Salary Sacrifice Scheme as opposed to Childcare Voucher Scheme, there would be no maximum limit to the amount that can be purchased. Should your child attend Tall Trees Day Nursery please contact the Adult and Child Care Co-ordinator for further information.

  1. I receive Free Nursery Education Funding for my 3 year old; will this be affected if I use childcare vouchers?

No. The Local Education Authority provides free nursery education places for all three and four year olds within the country. Funding will continue until the child starts full-time education. You will be able to use childcare vouchers to pay for any additional fees. Should your child be able to access the nursery grants whilst you are receiving childcare vouchers, this would be deemed as a life changing event and you would be able to adjust the deductions made.

  1. How do I join the childcare voucher scheme?

See ‘How do I join the childcare voucher scheme’ below.

  1. When do I need to complete my application form?

Application forms will need to be submitted by the end of the month prior to the month you would like the amount in vouchers sacrificed from your salary. Forms submitted after this date will be processed for the following month. Please make sure that you have read all of this information thoroughly before completing the application form.

  1. Any other questions?

Please log on to

Or

Tel: Edenred Enrolment Helpline on 0845 3304433

Alternatively contact: Victoria Cooney, Adult & Child Care Co-ordinator on telephone number 0162 918 4293

Email:

Glossary of terms

Preserved Pay – Your salary prior to entering into the sacrifice agreement.

Adjusted Salary – Your salary after application of the salary sacrifice.

NIC -National Insurance Contribution.

Edenred - The name of the company providing childcare vouchers

How do I join the childcare voucher scheme?

Joining the scheme is quick and simple, so here’s our step by step guide:

1)Work out how much of you salary you would like to take in vouchers each month. You can do this by dividing your annual childcare costsby twelve. You will need to take the same amount on a monthly basis (unless you have a lifestyle change which means that your need for childcare changes) although you will not need to use all your childcare vouchers in any given month - they can be saved for a later date when you need them. The Vouchers have no expiry date.

2) Check that your childcareris registered or approved and affiliated with Edenred.It is likely that your chosen carer(s) has been paid previously with Edenredvouchers and is therefore already affiliated to the network. Simply ask them for their Edenred Account Number, which will begin with a ‘P’ and which you will need in order to request electronic payments.

If your carer has not been paid with Edenredvouchers before, they can complete a Childcare Provider Affiliation Request online by visiting and clicking on ‘Accept vouchers’ in the Childcare Providers’ area. If they do not have internet access you can download a form for them.

It is a good idea to speak to your chosen childcarer to see that they are happy to take childcare vouchers as payment before you actually join the scheme. Most “group” care facilities (such as nurseries, crèches, playgroups, after school clubs and holiday play schemes) are already affiliated with Edenred to be paid via childcare vouchers, but if your carer has not been paid with Edenred vouchers before they simply need to complete an affiliation form.

3) Complete your own application form either on-line - click on ‘JOIN NOW’ in the parents section and enter Scheme ID PENN3027. If you do not have internet access you can telephone the Edenred Enrolment Helpline for an application formon 0800 2471277.