Salary sacrifice on creche fees

[Emmiou]

Depending on the creche you are using this may be of some use...I'm looking into the Salary Sacrifice Scheme for creche fees at the moment; there's an interesting thread over on Rollercoaster. [broken link removed]
I think if I can get enough other parents in my workplace involved it may be feasible, but it's still early days. Does anyone out there have any advice or are availing of this scheme?

 

[Flax]

Re: Mortgage Only but still struggling - Advice

Lots of great advice from other posters so far.

I think the simpliest solution is to get an au pair. A friend of mine did this for about two years - they normally get a salary of about €90 per week, but get full boarding in your home.

I would imagine on such an expensive house you have a spare room

Au pairs also do the cleaning and stuff like that, so it's unbelievable value.

You'd free up about 1500 per month...

 

[orka]

Re: Mortgage Only but still struggling - Advice

I think the simpliest solution is to get an au pair. ....
Au pairs also do the cleaning and stuff like that, so it's unbelievable value.

You'd free up about 1500 per month...

Au pairs are not slaves. They can work a maximum of 30 hours per week and need time off for English lessons. 30 hours per week won't cover the childcare requirements of fulltime commuting parents - never mind the 'cleaning and stuff'. You also need to consider the language development of the children - if the au pair is there to learn English, who is going to teach the children new words, reading etc. Au pairs can be a great supplement to childcare arrangements but can't really be used for fulltime working parents.

 

[ClubMan]

Re: Mortgage Only but still struggling - Advice

See here:

[broken link removed]

and section 10.4 of this

[broken link removed]

 

[Flax]

Re: Mortgage Only but still struggling - Advice

Au pairs are not slaves.

Eh... calm down.

They can work a maximum of 30 hours per week and need time off for English lessons. 30 hours per week won't cover the childcare requirements of fulltime commuting parents - never mind the 'cleaning and stuff'.

OK, so put the kids in a creche for half the day, save 1k per month. It's not complicated.

Are you a creche owner?

You also need to consider the language development of the children - if the au pair is there to learn English, who is going to teach the children new words, reading etc.

Most creches don't do that. I think perhaps you are confusing a montessori with a creche.

Au pairs can be a great supplement to childcare arrangements but can't really be used for fulltime working parents.

Neither can creches! An ex-girlfriend of mine worked in creches for many years and told me the children who spend a full day in a creche are a lot more unhappy and troubled than the children who spend a half day in the creche. So creches are definitely not a solution to absent parenting either.

 

[orka]

Re: Mortgage Only but still struggling - Advice

Veering off topic with this...

Eh... calm down.

Why? You want to pay an unfortunate foreign teenager €500 a month for replacement-creche childcare plus 'cleaning and stuff' - and you think this is an acceptable suggestion?

OK, so put the kids in a creche for half the day, save 1k per month. It's not complicated.

Minus the €500 for the au-pair so a €500 saving max. How will kids get home from crèche after half-day if it’s not walking distance?

Are you a creche owner?

No and my children are not in a crèche and have never been. My only close experience of a creche is my niece who is so happy and communicative – she knows lots of words for her age and is much more sociable than my children at that age.

Most creches don't do that (teach new words, reading). I think perhaps you are confusing a montessori with a creche.

You don’t have children do you? Children don’t learn new words with daily ‘new words’ lessons – they mainly learn through osmosis - ‘time for lunch’, ‘where is the ball?’, ‘here is your bottle’ etc. Unless the crèche staff spend the day mute and not communicating with the children, they WILL learn new words – a day spent around a foreign au-pair with very little English will be a very different learning experience.

Neither can crèches (“can't really be used for fulltime working parents”)! An ex-girlfriend of mine worked in creches for many years and told me the children who spend a full day in a creche are a lot more unhappy and troubled than the children who spend a half day in the creche. So creches are definitely not a solution to absent parenting either.

You can debate the merits of whether you approve of it or not but fulltime creche care is a possibility and a reality for many families in Ireland today (and just think how great you’re making those parents feel right now). Creches CAN be used for fulltime care. Au-pairs CANNOT.

 

[Flax]

Re: Mortgage Only but still struggling - Advice

Why? You want to pay an unfortunate foreign teenager €500 a month for replacement-creche childcare plus 'cleaning and stuff' - and you think this is an acceptable suggestion?

I don't think you understand what au pairing is. They CHOOSE to be an au pair. They are not kidnapped and forced into it. They know the salary and tasks up front. There is nothing unfortunate about this.

Minus the €500 for the au-pair so a €500 saving max.

€500 is a lot of money when you're struggling financially.

How will kids get home from crèche after half-day if it’s not walking distance?

We can find what-if's for every situation. Let's not go down that road, please.

You can debate the merits of whether you approve of it or not but fulltime creche care is a possibility and a reality for many families in Ireland today (and just think how great you’re making those parents feel right now). Creches CAN be used for fulltime care. Au-pairs CANNOT.

I'm sorry, but you cannot dismiss au pairs like that. They are an alternative to creches. I would accept, of course, that BOTH au pairs and creches have their positive and negative points. However au pairs are very cheap and the OP is having financial problems - namely €2000 per month onm creche fees.

PS Sorry for going off topic. This will be my last post on the subject.

 

[Emmiou]

Re: Mortgage Only but still struggling - Advice

Information from Revenue is available at [broken link removed]
I'm waiting on some user friendly information on the scheme from the two childcare companies mentioned on Rollercoaster, there appear to be some availing posters on the thread I previously mentioned - I think one of the AAM Mods may have requested more information over there. My workplace has its own creche facilities, I'm waiting a response from Personnel as to whether the scheme is already in place for Employees using that facility. I've informed colleagues currently using the two childcare companies about the scheme - hopefully they will be in a good position to help get this set up with our employer if it is possible, as soon as I have more information I will post it here. This scheme could amount to a considerable saving in childcare costs, it is very strange that there is so little information available.

 

[RainyDay]

Re: Mortgage Only but still struggling - Advice

Information from Revenue is available at [broken link removed]
I'm waiting on some user friendly information on the scheme from the two childcare companies mentioned on Rollercoaster, there appear to be some availing posters on the thread I previously mentioned - I think one of the AAM Mods may have requested more information over there. My workplace has its own creche facilities, I'm waiting a response from Personnel as to whether the scheme is already in place for Employees using that facility. I've informed colleagues currently using the two childcare companies about the scheme - hopefully they will be in a good position to help get this set up with our employer if it is possible, as soon as I have more information I will post it here. This scheme could amount to a considerable saving in childcare costs, it is very strange that there is so little information available.

That Revenue document specifically says that "The exemption does not apply if the employer simply pays or subsidises the cost to an employee of an independent crèche or nursery", so it would only apply where there is an in-house creche. This seems to contradict the information given on rollercoaster.ie, so to be honest, I'm sceptical that Revenue have approved this kind of company-funded childcare without triggering a BIK liability.

 

[CCOVICH]

Re: Mortgage Only but still struggling - Advice

Maybe a separate thread on the issue of au pairs etc. is required rather than dragging this thread off topic?

PS Sorry for going off topic. This will be my last post on the subject.

Yes-this is a Money Makeover thread. There is plenty of scope to discuss the Au Pair issue further in Letting Off Steam. Let's just hear constructive suggestions to address the issues raised by the OP.

If anything has been said about the cost or availability of Au Pairs is incorrect, feel free to correct it. Anything else said on the matter outside those lines will be deleted.

Thanks.

 

[Emmiou]

Re: Mortgage Only but still struggling - Advice

Salary Sacrifice for Creche Fees


I’ve just spoken to someone in the financial department of one of the crèche chains and she confirmed that the Salary Sacrifice scheme is in use. Your Employer must first apply to Revenue to get approval to join the scheme, and then reserve a certain number of childcare places. Your Employer pays a fee (E1500 was mentioned) per child. The monthly crèche fee is then paid directly by your Employer. Your salary is reduced pre-tax etc by this amount, same as the tax-saver bus tickets, leading to the possible 47% saving.

There is a requirement for Employer participation in the Management Committee of the crèche – I don’t have details regarding the extent of this participation yet but have requested that all information literature about the scheme be sent to my HR department – it wasn’t possible to have it sent directly to me. I was advised that the scheme was, unfortunately, likely to be a non-starter with my Employer (Government funded) but is suited to private companies.

My apologies if I have any of the above details or their implications incorrect, I have very limited finance/tax knowledge, but know that my colleagues and I would be very anxious to avail of this scheme if feasible.

 

[RainyDay]

Re: Mortgage Only but still struggling - Advice

Thanks for the update Emmiou. However, I'm still a bit sceptical about this scheme, until I see information from Revenue and/or information publicly provided by the creche providers. It seems to be a bit 'under the counter' at the moment.

 

[ClubMan]

Re: Mortgage Only but still struggling - Advice

As far as I know the BIK booklet linked to earlier is still authoritative and sets out the conditions under which employer funded childcare facilities/services are exempt from BIK.

 

[Carrigbabe]

Hi Emmiou,
Did you find out anything further on the salary scheme, i just found that rollercoaster thread there myself. Would be brilliant if we could get that in our workplace, it sounds like the type of thing our HR manager would push for as she has a one year old herself.
Keep us posted on how you get on.

 

[ClubMan]

As I said in my previous post - the BIK booklet to which I referred is, as far as I know, authoritative in terms of what sorts of schemes/benefits can be exempted from BIK. Some childcare benefits may be as outlined in that booklet.