As a result of amendments introduced this year, employees must continue to receive all their contractual benefits except pay during Additional Maternity Leave. Examples of such non-cash entitlements include company cars, mobile phones, medical insurance, non-cash vouchers etc.

When a woman is on statutory maternity leave there is no statutory obligation that she should continue to receive remuneration from her employer except where the employee qualifies for Statutory Maternity Pay (SMP). The terms and conditions of her employment may entitle her normally to receive benefits other than remuneration. If so, amendments made in 2008 to the Sex Discrimination Act have extended the period during which she may continue to benefit from contractual non-cash benefits during statutory maternity leave. There will be no change to the position for sums payable as wages or salary or pension contributions other than SMP.

At present, employees must continue to receive all their contractual benefits other than remuneration during Ordinary Maternity Leave (the first 26 weeks). The new amendments mean that employees must continue to receive all their contractual benefits except pay during Additional Maternity Leave (the second 26 weeks). Employees who are denied this entitlement will be able to bring a claim of sex discrimination against their employer. These non-cash entitlements could include

• company cars, mobile phones, living accommodation or other assets provided to the employee for non-business use;
• medical / dental / critical illness / travel / car insurance
• non-cash vouchers, such as childcare vouchers
• the right to accrue contractual annual leave.

The variety of non-cash benefits can be considerable. Their treatment for tax and National Insurance Contributions purposes varies-they can be subject to tax under PAYE or under the P11D procedure.

These changes will apply to women where the week their baby is due begins on or after 5 October 2008.

For further information on these new rules and an outline of the impacts salary sacrifice arrangements have on Statutory Maternity Pay please see http://www.hmrc.gov.uk/employers/sml-salary-sacrifice.pdf