i-Choose Introduction Leaflet
Sheffield Teaching Hospitals operates a staff benefits scheme called i-Choose. Under which you can select a bicycle, childcare vouchers or pay for car parking by having the cost reduced from your salary, saving you tax and National Insurance Contributions (NIC).
You will essentially be giving up part of your salary in exchange for a non-cash benefit (bicycle, car parking or childcare vouchers) which is treated more favourably for tax and NIC.
In order to join i-Choose and to start achieving savings, you need to send the completed application to the Payroll Department.
Please note that when entering a salary sacrifice arrangement it is important to consider the potential effect that a reduction in pay might have on:
• The value of your NHS pension and lump sum.
• Your entitlement to Working or Child Tax Credits.
• Your entitlement to State Pension or other benefits.
• Any statutory benefits such as Maternity or paternity pay, adoption leave or sick pay.
Why is the Trust doing this?
The Trust wants to ensure that you are able to maximise the tax and NIC savings available through government incentives. In addition, through your participation the Trust also benefits from reduced NIC and pension contributions.
Who can be part of this scheme?
All Sheffield Teaching Hospitals NHS Foundation Trust staff are eligible to participate in i-Choose. The only restrictions in place are that your salary after selecting the benefits must not reduce below the National Minimum Wage or the Lower Earnings Limit.
Unfortunately if currently you work on a zero hour contract you are unable to participate as your salary cannot be reduced.
Can I make changes to my benefits after joining i-Choose or join at a later date?
As participation in i-Choose requires making a change to your terms and conditions you will only be able to ‘opt out’ at the scheme renewal date each year. However, if there is a change in your personal circumstances you may be able to request changes to certain existing benefits or select new benefits, these circumstances are called ‘lifestyle events’.
HMRC has previously agreed the following lifestyle events:
• Having a baby / adopting a child.
• Maternity / paternity leave.
• Long term sick / unpaid leave.
• Divorce / separation.
• The death of a partner / child.
• Significant change in childcare arrangements.
• Salary drops below National Minimum Wage or Lower Earnings Limit
You should direct all requests for changes to the i-Choose Co-ordinator. All requests will be considered on an individual basis and the decision as to which benefit can be changed will depend on the lifestyle event you have experienced.
What happens if I leave the Trust?
You must inform the i-Choose Co-ordinator immediately when you are made aware that you will be leaving the Trust.
Your sacrifice will automatically terminate on the date you leave the Trust. For more information you should consult the individual i-Choose benefit leaflets.
What effect does i-Choose have on my maternity or sick pay?
As your maternity / sick pay is based on your salary after reductions participation in i-Choose will affect the level of benefit you receive. At the time of going on maternity or paternity leave, adopt a child or go on long term sick leave you will have the option to review your benefit selection and we suggest contacting the i-Choose Co-ordinator to discuss your options further.
What happens if I go on maternity / paternity or unpaid leave or have a period of long term sick?
It is particularly important that you understand your choices in respect of your entitlement to obtain childcare vouchers under i-Choose whilst on maternity leave and the impact that salary sacrifice can have on your maternity pay. Please speak to HR or your i-Choose Co-ordinator as soon as possible for more details if you believe this may affect you.
What effect does i-Choose have on my statutory benefits?
The affect of reducing your salary for i-Choose may impact on some of your Statutory Benefits such as Working Family Tax Credits or Child Tax Credits. It may also affect your entitlement to state benefits.
For full details you should visit either:
or
As your entitlement to state benefits may be affected by factors not known to the Trust we are unable to advise you on this matter.
If you need further assistance you should contact an Independent Financial Advisor or the Citizens Advice Bureau.
Will I lose any pension benefits by taking a reduced salary?
As a member of the NHS pension scheme which requires contributions to be calculated on the post-sacrifice salary, there could be consequential effects upon your benefit entitlement. The NHS pension scheme is a defined benefit scheme. By selecting benefits through i-Choose you are authorising reductions from your salary to be made. This salary may be used to calculate the amount of pension contributions you make and the benefits you could expect to receive.
In the scheme applied up to 1 April 2008 the pension is based on the best 12 months’ earnings over the final three years of the member’s career. In the New NHS Pension Scheme for members joining after 1 April 2008 the pension is based on the average of the best three consecutive years’ pay in the last 10 years. For certain medical staff pensions are based on career average earnings (e.g. General Practitioners).
Consequently, for employees who are far off retirement in practice the salary sacrifice is unlikely to affect pension benefits, (final three years for current scheme members, or 10 years for new scheme members). However, the life assurance component (death-in-service) would certainly be affected, as would your benefit for a deferred, or ill-health, pension.
The exact details of the pension scheme varies and you may wish to contact the Trust’s Payroll Department for further information, particularly if you are over 50 or are paying / wish to consider paying Additional Voluntary Contributions.
Will i-Choose affect my application for loans and mortgages?
It should not affect any application for loans or mortgages. Your lender will write to the Trust for a reference. We will give the lender details of your notional salary (which is your salary before reductions), which the majority of lenders will accept. However the Trust is not able to guarantee that all lenders will accept this position.
I am a new joiner to the Trust, can I join i-Choose?
Yes, although you are unable to select the bike benefit until the next selection period.
What happens if any salary sacrificed takes my pay below the National Minimum Wage?
A salary sacrifice arrangement must not reduce your cash pay below the National Minimum Wage. A control will be in place when you join i-Choose to prevent this from happening.
N.B.If your circumstances change you must advise Payroll accordingly. Please be aware abuse of the i-Choose scheme will be treated as a disciplinary offence.
Contacts and Further Information
For more information contact:
i-Choose Co-ordinator0114 305 2427 (STH Ext 52427)
All the leaflets and information is on the Trust’s intranet site under News & Other Useful Stuff – Staff Benefits – i-Choose: