Nursery Extra - University of York

Nursery Extraand Nursery PlusYork CampusNurserywww.york.ac.uk/univ/nrsryNursery ExtraNursery Plus

WelcomeNursery ExtraNursery PlusNursery Extraand Nursery PlusThe University of York and its subsidiary companies, includingYCL and NYCH, are committed to promoting back to work,flexible working arrangements and affordable childcare foremployees. They want to provide nursery facilities in the mostcost-effective manner for all. To this end the University providesNursery Extra to be used through York Campus Nursery(www.york.ac.uk/univ/nrsry), which is a salary exchangeopportunity within the Rewards Extra integrated benefitscheme. The University’s subsidiary companies provideNursery Plus, an identical scheme which is part of theEmployee Plus benefits package. For the purposes of thisdocument, the University of York and its subsidiary companiesshall hereby by be collectively referred to as “The Company.”The Nursery Extra and Nursery Plus schemes work in exactlythe same way and shall hereby be referred to as “NurseryExtra/Plus.”Nursery Extra/Plus has been designed to give a real benefitthrough tax efficiencies for all Company employees. UnderNursery Extra/Plus the Company is providing you with thechoice to make childcare more affordable through salaryexchange when using York Campus Nursery. Depending onyour personal circumstances, it will be possible to effectivelyreduce your childcare costs typically by between 29% and41%. These savings are achievable through tax and NationalInsurance (NIC) efficiencies. Please see the Nursery websitefor fees (www.york.ac.uk/univ/nrsry).This booklet aims to explain these efficiencies in more detail,answering the questions you may have, with an explanationof the proposals and points which you will need to take intoconsideration when deciding whether to participate.Who is eligible to participate?This arrangement will only be available to you if you are anemployee of the Company and have parental responsibility forany children placed in York Campus Nursery (www.york.ac.uk/univ/nrsry). This is one of the conditions required to ensurethat a nursery place is not taxable as a benefit in kind (for thepurpose of these arrangements, parental responsibility meanshaving all rights, duties, powers, responsibilities and authoritywhich by law a parent of a child has in relation to the child andthe property of the child).Nursery Extra/Plus is also subject to the other standardeligibility rules for salary exchange schemes which include:having a contract for greater than 12 months at the time ofsigning up to the scheme, actual earnings in excess of theCompany’s Pay Protection Limit and above the NationalMinimum Wage. There is no obligation on employees toparticipate in these arrangements in which case you willcontinue to pay for sessions from your net pay as at present.However, many similar public sector organisations haveimplemented such salary exchange or sacrifice arrangementswhich have been well received by their employees as there arethe obvious benefits to them.Rewards Extra2The benefits scheme for Commercial Services staff

Nursery ExtraNursery PlusWhat is involved?(a) The Company will provide you with an agreed number ofchildcare sessions at the Nursery and you will agree toenter into a salary exchange agreement. However, you willcontinue to be charged in the normal way for any additionalad hoc Nursery sessions you might request, which are notcovered by the salary exchange agreement.(b) Under Nursery Extra/Plus, you agree to a reduction in yourgross basic pay. The amount of the reduction will dependupon the level of childcare you select.(c) The proposed arrangements can have an impact on certainentitlements to benefits such as the childcare element ofworking tax credits and as a consequence the Companyrecommends that you consider this matter before opting toparticipate in the arrangement. Further information on this isprovided in this booklet.What are the general effects of reducingsalary?Nursery Extra/Plus is no different in principle to other salaryexchange benefits offered under Rewards Extra and EmployeePlus. If you participate in Nursery Extra/Plus, you will pay areduced amount of tax and NIC and you will therefore be betteroff each month. As with other salary exchange benefits:n You cannot reduce your salary to a level below the NationalMinimum Wage. You may therefore have to restrict the levelof exchange under Nursery Extra/Plus to ensure that yourearnings still remain above this level;n You cannot reduce your salary to a level below theCompany’s Pay Protection Limit. This is to ensure that yourearnings do not fall below the NIC Lower Earnings Thresholdin order to protect certain state benefits;n Your pension and other similar benefits will continue to bebased on your pay before taking account of any salaryexchange adjustments (known as Notional Salary);n In order for the salary exchange to be effective, theCompany will need to make amendments to your Terms andConditions in accordance with the provisions of Section 4of the Employment Rights Act 1996. It is important that youunderstand and agree these changes.Nursery Extra and Nursery Plus are both parts of integratedbenefits schemes, so further information is available on theimpact of salary exchange at the Frequently Asked Questionssection on your Employee benefits webpages. This includesinformation in relation to maternity, adoption, lifestyle changesetc. There are however some specific matters relating tochildcare which need to be carefully considered and areincluded overleaf.Rewards Extra3The benefits scheme for Commercial Services staff

Nursery ExtraNursery PlusWhat if I am claimingTax Credits?Tax credit entitlement is based upon the level of earnings youare receiving. Therefore if you are reducing your salary youmay actually be entitled to more in tax credits. There mayhowever be a potential adverse affect on the childcare elementof the Working Tax Credit (WTC) you are entitled to.Agreeing to participate in this salary exchange arrangementmay, in the same way as taking childcare vouchers, have anegative impact on the amount of the childcare element ofWTC you receive. This is because you are no longer paying forchildcare costs under Nursery Extra/Plus and therefore thesecosts will not qualify for tax credits.If you are currently claiming the childcare element of WTC youshould consider very carefully the likely impact on your netdisposable income before committing yourself to any salaryexchange/sacrifice.In order to make a decision, before going any further pleasecontact the HM Revenue & Customs helpline on 0345 3003900 or website; www.hmrc.gov.uk/taxcredits/ paymentsentitlement/entitlement/question-how-much.htmso they canadvise you on the impact of salary sacrifice on the childcareelement of the WTC.Will any other benefits be affected?All other benefits e.g. pay rises, overtime, shift pay, etc. willbe based on your Notional Pay (ie your pay prior to any SalaryExchange reduction), and therefore your benefits will not beaffected.Will my State Pension be affected?As the University Pension Schemes are contracted out of theState Second Pension, there will be no negative impact onthese benefits unless you are not a member of either Universitypension scheme. By setting a Pay Protection Limit we aretherefore able to safeguard your State Pension.What if I want extra ad hoc childcaresessions?In the event that you require childcare sessions outsidethose you have already agreed to under the salary exchangearrangement, then as at present, the cost of these additionalsessions will need to be made from your net salary and will beoutside the salary exchange scheme.Rewards Extra4The benefits scheme for Commercial Services staff

Nursery ExtraNursery PlusWhat if my child qualifies for the ‘FreeEarly Years Entitlement’?If you currently receive funding for your child then you willcurrently not pay this element of your nursery costs. YorkCampus Nursery will continue to receive this funding so itis only any costs that you currently pay which need to beconsidered for inclusion in Nursery Extra/Plus.Your Nursery Manager will advise you when and if your childis eligible to qualify for the grant. This will constitute a LifestyleChange and you can reduce the level of salary exchange toreflect your specific needs. This will be in line with the amountof grant you will receive. You will be asked to complete aLifestyle Change form to enable you to sign up to and agreethe lower salary amount you will need to exchange to maintainthe same level of childcare provision. Any additional childcarecosts will need to be met from your net salary.What if I want to change the number ofchildcare sessions I take?If you choose not to participate in the salary exchangearrangement, please continue as you currently do and givefour week’s notice of the changes you would like to make.If you participate in Nursery Extra/Plus, you can complete aLifestyle Change form if there is a significant change in yourchildcare circumstances. This will enable you to enter into arevised salary exchange agreement which reflects the newlevel of childcare required.Am I able to exchange both my salary forthis scheme and vouchers for my otherchild?In the event that you may require this you can also takeadditional vouchers provided again your salary does not fallbelow the NMW and/or Pay Protection Limit.How long does the arrangement last for?Nursery Extra arrangements will run from 1 October to 30September each year. Nursery Plus arrangements will runfrom 1 December to 30 November. If you qualify for a lifestylechange within the period the arrangement, then you may beable to amend or stop your payments. If you do choose toopt out, you will not enjoy any of the efficiencies under theproposed arrangements and, as a result, your salary will revertto the salary before exchange and your net disposable incomewill decrease.How do I know if the Nursery fees havebeen reduced by my chosen amount?You will know if the reduction is correct by checking yourpayslip. On the payment side of your payslip you will see anentry called ‘Nursery Salary Exch’ and this should match themonthly cost of your childcare.What happens if I go on holiday?Please advise York Campus Nursery if your child will beabsent. Salary exchange amounts will remain unchanged.Nursery closures such as Christmas and other bank holidays,currently amounting to three weeks, will remain at no charge toparents.I have two children at the nursery - can Isalary exchange enough funds to coverthe fees?You can exchange the full costs of the fees for both yourchildren as long as the reduction does not take your salarybelow the NMW and/or Pay Protection Limit.I currently pay Nursery fees withchildcare vouchers taken under a SalaryExchange scheme – do I need to stopthese?If you currently use childcare vouchers under Salary Exchangewith the Nursery (either through Rewards Extra, EmployeePlus or through a scheme in which your spouse/partnerparticipates) you will gain no further tax and NIC relief on thisproportion of your childcare costs.Rewards Extra5The benefits scheme for Commercial Services staff

Nursery ExtraNursery PlusWill my terms and conditions ofemployment need to change?As you are giving up your right to an element of your salary,there will be a need to amend your terms and conditions ofemployment.For University Employees: This will be done via the RewardsExtra Benefit selection website by your confirming your wishto apply for the arrangements and authorising us to reduceyour salary. Please read the Rewards Extra General Termsand Conditions for full details. http://www.york.ac.uk/admin/hr/resources/rewards_extra/appendix-4-terms-conditions.pdfFor Employees of a UoY Subsidiary Company: This willbe done via the Employee Plus Benefit selection websiteby your confirming your wish to apply for the arrangementsand authorising us to reduce your salary. Please read TheEmployee Plus General Terms and Conditions for full details:www.york.ac.uk/commercialservices/employeeplusHow do I proceed?For University Employees: If you wish to participate in thearrangements, you can elect to do so via the Rewards ExtraBenefit Selection website: www.york.ac.uk/rewardsextrawhich will have full information on Nursery Extra. You will berequired to select the level of salary exchange you require forNursery Extra until 30 September, when you will again have theopportunity to change your Rewards Extra choices for the yearahead. If you have any questions, please contact rewardsextra@york.ac.ukor by telephone on extension 4835.For Employees of a UoY Subsidiary Company: If you wishto participate in the arrangements, you can elect to do so viathe Employee Plus Benefit Selection website: www.york.ac.uk/commercialservices/employeeplus. You will be required toselect the level of salary exchange you require for Nursery Plusuntil 30 November, when you will again have the opportunity tochange your Rewards Extra choices for the year ahead. If youhave any questions, please contact ycl-employeeplus@york.ac.uk or by telephone on extension 8451.Rewards Extra6The benefits scheme for Commercial Services staff

Nursery ExtraNursery PlusDisclaimerNo information in this brochure should be taken as a personalrecommendation or advice on the part of the University of Yorkor any of its suppliers or partners.Whilst every effort is made to maintain the accuracy of thisbrochure, it is only intended to act as a guide to the scheme. Inthe event that there is inconsistency between the brochure andthe provider’s terms and conditions, the provider’s terms andconditions will prevail.To set up and administer your benefit selections, informationabout you and your partner, spouse and family members maybe provided to the Company’s benefit advisors, providers andadministrators. Please see Appendix 4 - General Terms andConditions of either the Rewards Extra Benefits Scheme or theEmployee Plus Benefits Scheme for full details of all terms andconditions.www.york.ac.uk/rewardsextrawww.york.ac.uk/commercialservices/employeeplusJuly 201319310 – www.studio.crevado.comYork CampusNurseryRewards ExtraThe benefits scheme for Commercial Services staff