Childcare Vouchers – what to do following the delayed closure

The government announced this week that it would be delaying the closure of employer paid Childcare Vouchers by six months. We wanted to know what to do following the delayed closure, so we caught up with Reward Gateway childcare voucher expert and Product Manager, Cat Wright.

“The slower than expected take up and technical difficulties are perhaps no surprise to those in the HR world familiar with the difficulties implementing a new benefit to an organisation, let alone a whole country. But the extra time afforded while the government works to resolve these issues is a fantastic bonus for organisations wanting to get the most out of this valuable benefit.

I’ve spent a lot of time over the past few months speaking with HR teams about the changes, and these are my top points that your organisation should be considering.

In terms of the particulars of the two schemes, they operate in very different ways, with no clear winner between the two. If staff do elect to join the government’s Tax Free Childcare scheme they won’t be able to move onto Childcare Vouchers later so its important that your working parents understand the key differences and make an informed decision. MoneySavingExpert.com does a great comparison calculator, or for a quick digest we built this comparison table.

Communicating options

The first priority should be communicating the options to your staff. I’m sure most organisations have already devoted energy to this in the past few months, but as we know, it takes a lot to get a message through. Take a look at your success thus far in terms of engagement with the benefit; a good benchmark is 5% take up, how close are you to that target? Try and utilise as many channels as you can in this new phase of communications with emails, briefings, flyers, or why not get creative with social media posts or desk drops? You can see more advice about how to communicate with staff over at the Reward Gateway blog here

Staff on Parental Leave

An important element when communicating the changes is your staff on parental leave. They won’t be engaging with your regular channels so this is definitely a group that could benefit from a letter or even a phone call home. Make sure they understand the deadlines for signing up, and if necessary get them to apply for at least one contribution before they go on SMP. If not, you might want to consider topping up their pay for one month to allow them to apply. This will reserve their spot when they return to work and allow them to make use of Childcare Vouchers.

Your HR budget

One area that many companies should invest some time in is assessing how a diminishing pool of Childcare Voucher parents will influence their wider HR budget. The payroll savings you make in tax and NI contributions are often a key part in offsetting a benefits budget, you need to be prepared for how this might impact future years budgets. Bringing in other salary sacrifice or payroll benefits such as Cycle to Work, Holiday Trading or Pension contributions are a great way to offset this, and could help bridge the gap left in your benefits offering by Childcare Vouchers.

If you use the next six months to your advantage, there’s no reason that you shouldn’t go into the next stage of Childcare Vouchers’ life in a robust, healthy position with staff that understand their options and an organisation prepared for the strategic and financial changes.”