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i-Choose Introduction Leaflet (effective from 6 April 2017)

Sheffield Teaching Hospitals operates a employee benefits package called i-Choose.Under the arrangement you can select a bicycle under the Cycle to Work scheme, childcare vouchers, home electronics/white goods or a car parking permit, by having the cost reduced from your salary. As a result of this the employee saves on Tax,National Insurance Contributions (NIC) and Pension contributions (if opted into the scheme), which are deducted from your pay each month.

Please note that when entering a salary sacrifice arrangement it is important to consider the potential effect that a reduction in pay might have on:

The value of your NHS pension and lump sum;
The value of your NEST(National Employment Savings Trust) pension;
Your entitlement to Universal, Working or Child Tax Credits;
Your entitlement to State Pension or other benefits;
Any statutory benefits such as Maternity or paternity pay, adoption leave or statutory sick pay.

Who can be part of this scheme?

All Sheffield Teaching Hospitals NHS Foundation Trust employees are eligible to participate in i-Choose. The only restrictions in place are that your salary after selecting the benefits must not reduce below the National Minimum or Living Wage, ensuring that the Trust is complying with legislation. For those employees currently employed on a zero hour’s contract, unfortunately, you are unable to participate as there is no salary to be reduced.

What benefits are there in joining the scheme?

The Trust wants to ensure that employees have access to a range of benefits whilst also ensuring employees are able to maximise savings through Tax, NIC’sand pension savings. In addition, through your participation in the scheme, the Trust also benefits from reduced NIC’s and pension contributions.

Are there Tax implications of receiving Benefits in Kind?

Yes, there are Tax implications for some schemes; this is dependent on the salary sacrifice scheme you are entering into. From 6 April 2017, HMRC’s stance on salary sacrifice benefits changed, which now means more benefits provided under the scheme are affected, this does not include Childcare Vouchers or the Cycle to Work scheme.

Employees who participate in any of the schemes where the benefit is classed as a benefit in kind, will have the tax on the benefit deducted from their pay each month, this is known as Taxing at Source and can be identified on your payslip as “Payrolled Benefit”.

Who can be part of this scheme?

Can I make changes to my benefits after joining i-Choose or join at a later date?

As participation in i-Choose requires making a change to your terms and conditions of employment, you will only be able to ‘opt out’ at the scheme renewal date each year. However, if there is a change in your personal circumstances you may be able to request changes to certain existing benefits or select new benefits, these circumstances are called ‘lifestyle events’.

HMRC have previously agreed the following lifestyle events (examples only, other changes may apply at the Trust’s discretion)

• Maternity / paternity leave / adoption leave;

• Long term sick / unpaid leave;

• Divorce / separation;

• The death of a partner / child;

• Significant change in childcare arrangements;

• Salary drops below National Minimum/Living Wage.

You should direct all requests for changes to the i-Choose Co-ordinator. All requests will be considered on an individual basis and the decision as to which benefit can be changed will depend on the lifestyle event you have notified.

What happens if I leave the Trust?

You must inform the i-Choose Co-ordinator immediately when you are made aware that you will be leaving the Trust.

Your salary sacrifice arrangement will automatically terminate on the date you leave the Trust. For more information you should consult the individual i-Choose benefit leaflets regarding what happens at the end of the scheme.

Are there any charges at the end of the scheme or when I leave?

There may be end of scheme charges, known as early termination charges if you leave a scheme early, this is dependent on the type of scheme you are in, you will need to refer to your contractual document or contact your i-Choose co-ordinator for further information.

Similarly, for some schemes, again dependent on the benefit being provided, there may be end of scheme charges to transfer the ownership of goods from the Trust to the employee, further information will be in the relevant scheme documentation.

What effect does i-Choose have on my maternity or sick pay?

As your maternity / sick pay is based on your salary after reductions participation in

i-Choose could affect the level of benefit you receive. At the time of going on maternity, paternity or adoption leave, you will have the option to review your benefit selection and we suggest contacting the i-Choose Co-ordinator to discuss your options further.

What happens if I go on maternity / paternity or unpaid leave or have a period of long term sick?

It is particularly important that you understand your choices in respect of your entitlement to obtain childcare vouchers under i-Choose whilst on maternity leave and the impact that salary sacrifice can have on your maternity pay. Please speak to youri-Choose Co-ordinator as soon as possible for more details if you believe this may affect you.

The onus is on you to contact the i-choose coordinator as soon as possible with regard to your maternity pay calculation period. Late notification could adversely affect your maternity pay calculation.Earnings for the calculation period will be based on the salary sacrifice reduced pay unless you either opt out of the scheme or decide to reduce the level to minimise the effect on your pay. This cannot be recalculated on a retrospective basis.

What effect does i-Choose have on my statutory benefits?

The affect of reducing your salary for i-Choose may impact on some of your Statutory Benefits such as Universal, Working or Child Tax Credits. It may also affect your entitlement to state benefits.

For full details you should visit either:

As your entitlement to state benefits may be affected by factors not known to the Trust we are unable to advise you on this matter.

Will I lose any NHS Pension benefits by taking a reduced salary?

Salary sacrifice is effectively giving up part of your salary for a benefit that is offered by your employer. This will reduce your Total Pensionable Pay (TPP) as the amount sacrificed or used to pay for the items is taken directly from the gross pay.Pension is only paid on the remaining amount i.e. the TPP after the salary sacrifice amount has been taken off.

NHS Pension Scheme Members

1995 section members

For members of the 1995 section, if salary sacrifice is carried out within the last 3 years of pensionable membership before retirement, this could affect the calculation of your pension

2008 section members

For members of the 2008 section, if the salary sacrifice is carried out within the last 10 years of pensionable membership before retirement, this could affect the calculation of your pension.

2015 section members

For members of the 2015 section, as the scheme uses average earnings throughout your career to calculate your pension, a reduction in gross pensionable pay will have a negative effect on the amount of pension built up in that year. The overall effect from participating in any salary sacrifice scheme would reduce the amount of final pension benefits earned.

Note for all NHS schemes members

The life assurance component (death-in-service) would also be affected, as would your benefit for a deferred, or ill-health, pension.

NEST (National Employment Savings Trust) Pension scheme members

Your contributions are based on your gross pensionable pay. Your Gross pay is reduced under a salary sacrifice arrangement so the amount you and your employer contribute to the NEST Pension scheme will be reduced. This means that overall the amount invested in your pension will be reduced and the amount that you will receive once you receive your pension will also be reduced.

If you wish to obtain Information

The exact details of the pension scheme vary and you may wish to contact the Trust’s Pensions Department. For further information only email 190 Pensions on the Trust’s email system.

If you wish to obtain Financial Advice

Please seek advice from a registered Independent Financial Advisor (IFA), who will be able to give you advice on the decision to join or remain in the salary sacrifice scheme based on the benefits and savings you will make against the impact on your pension in the future.

Will i-Choose affect my application for loans and mortgages?

It should not affect any application for loans or mortgages. Your lender will write to the Trust for a reference. We will give the lender details of your notional salary (which is your salary before reductions), which the majority of lenders will accept. However, the Trust is not able to guarantee that all lenders will accept this position.

I am a new joiner to the Trust, can I join i-Choose?

Yes, although some schemes do not run continuously throughout the year and have a selection “window”, therefore, please contact your i-Choose co-ordinator for further details.

What happens if any salary sacrificed takes my pay below the National Minimum Wage(NMW) or National Living Wage(NLW)?

A salary sacrifice arrangement must not reduce your cash pay below the NMW or NLW. A control will be in place when you join i-Choose to prevent this from happening.

Contacts and Further Information

i-Choose Co-ordinator0114 305 2427 (STH Ext 52427)

All the leaflets and information can be accessed on

Trust’s intranet site under News & Other Useful Stuff – Staff Benefits –

i-Choose:

Updated March 2017