Government urged to give guidance on childcare vouchers

The Daycare Trust has urged the government to provide reassurance to employers considering withdrawing from the childcare vouchers scheme over concerns about a European court ruling. The childcare charity said there was no evidence of employers pulling out “en masse” from the scheme, after a ruling last October that companies should continue to make payments for vouchers when female workers take maternity leave without their salary.

But the British Chambers of Commerce (BCC) is advising employers to stop offering the benefit if they are worried about becoming liable for costs in such cases. The childcare vouchers scheme, which was introduced in 2005, allows employees to sacrifice part of their salary in exchange for the vouchers. Employers do not have to pay national insurance on money that staff contribute to vouchers.

The Daycare Trust has met with the BCC to discuss the situation but has found no evidence of companies withdrawing from the scheme since the ruling, which has not yet been tested in court. A Daycare Trust spokesman said: “It is not helpful for parents or employers to be panicked while there’s no evidence of employers abandoning the scheme. But it’s clear there is concern and the government should put out some guidance to make clear employers’ responsibilities.”

He added that if employers are losing out as a result of the change, the government should look at a method of protection and compensation.

A Department for Business, Enterprise and Regulatory Reform spokesman said: “This is an issue we are looking at closely. We believe that providing contractual benefits via salary sacrifice can have real benefits for businesses. We expect to publish new guidance on the issue over the summer.”

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