Salary sacrifice query
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  1. #1
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    Default Salary sacrifice query

    Hoping someone can advise here, as both myself and parents been hitting a brick wall with this!
    Parent pays for their child's care through a salary sacrifice scheme and has recently had another baby. As she is now on maternity leave (and pay), she won't require care for the older child from Sept onwards, but intends to place baby with me early in the new year if I have space.

    She has been advised that if she stops the payments (for the older child) from the scheme now, she won't be able to resume them to pay for future childcare, and can't 'bank' or accrue them herself until she returns to work.
    Meanwhile, these direct salary payments will continue to be credited to my account(and declared on my tax return as income), and I understand that as I'm unable to refund these either to her or her employer ( L.A in this case;mum teaches)until they're needed, would it be possible to use the payments as either a retainer for baby's future place, or deposit , which I would normally offset against a child's final month's fees to cover a notice period?
    Either way, they would still be used to pay for childcare, but is this ok to do?


    Any advice would really be appreciated, thank you, and sorry for the long post x

  2. #2
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    hmmm, interesting query.

    I honestly don't know ... can mum not 'bank' the full amount, but just pay you a smaller amount? I'm sure I had a mum who did that, so that she built up a balance to pay over the school holidays.

    Are you 'saving' a space for the child? Are you requesting a retainer fee? and because this space would be available should the child require it, then I think it would be ok for mum to pay using the scheme, or baby could perhaps come to you for a couple of hours a week? oh, I've just seen you're hoping you'll have a space when mum needs it... hm in that case I don't know. I think you would be better off/on safer ground only taking the payments if you have a guaranteed space for baby.

    I shall be watching with interest to see what other answers you get.

    x

  3. #3
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    Quote Originally Posted by loocyloo View Post
    hmmm, interesting query.

    I honestly don't know ... can mum not 'bank' the full amount, but just pay you a smaller amount? I'm sure I had a mum who did that, so that she built up a balance to pay over the school holidays.

    Are you 'saving' a space for the child? Are you requesting a retainer fee? and because this space would be available should the child require it, then I think it would be ok for mum to pay using the scheme, or baby could perhaps come to you for a couple of hours a week? oh, I've just seen you're hoping you'll have a space when mum needs it... hm in that case I don't know. I think you would be better off/on safer ground only taking the payments if you have a guaranteed space for baby.

    I shall be watching with interest to see what other answers you get.

    x
    Thanks loocyloo; yes, it would make sense to me for mum to be able to 'bank' the full amount so that she could then use it for childcare later, but she's been told that once set up, the payments can't accrue or be 'held' , but will continue unless she stops the scheme permanently!
    We're at the discussion stage at the moment regarding future care for the baby; parents understand that I'll need to fill the space vacated by the older child, but as it's early days still, can't say with any certainty when/which days etc they'd need care for in the new year.
    Having a retainer is just an idea which might work, since I can't refund any overpayments from the scheme, but I assume retainers are non refundable anyway, as they secure the space for the child, so I'd then save a space (which may or may not be suitable when the time comes!). I'm confusing myself now, but I'm thinking unless we arrange something like a retainer or deposit at this stage, with the payments earmarked for childcare,there's not much more I can do; parents are totally upfront and understanding, but the situation is now causing anxiety on all sides x

 

 

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