Is healthcare for dependants able to be sal sac?

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Employers pays healthcare for employees via PBIK.

To add dependants to their policy is an optional extra at a cost to the employee. 

Can this cost of the employees' dependants healthcare be salary sacrificed?

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By David Ex
11th Jan 2024 17:01

I imagine so (subject to usual considerations) but you'd need to take advice on the tax consequences.

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By FactChecker
11th Jan 2024 21:00

What is it with this daily inundation of queries re Salary Sacrifice?

That's not aimed specifically at you, OP, but it might as well be given the apparent lack of basic understanding of the topic:

1. Salary Sacrifice is a contractual reduction in Salary (not a deduction taken from it), and the new lower salary will remain in place until the employee dies or ceases employment or (hopefully more likely) encounters a 'lifestyle event' defined in the SalSac Agreement (which must exist in writing) allowing both parties to end it.

2. Alongside the SalSac, but not directly connected to it, the ER is likely to have agreed to provide the affected EE with a non-cash benefit (BiK) - usually but not essentially with a comparable 'value' to the sacrificed salary.
[The meaning of 'value' can depend on the nature of the benefit - see the 'optional remuneration arrangement' rules.]

3. Those two items are technically independent - which is why the former can have an impact on statutory pay & rights, whilst the latter may be treated as a taxable BiK if it is not one of the relatively few types outside that regime.

So ... provision of Private Healthcare Insurance is a classic BiK and, in terms of your question, might be the quid pro quo agreed by ER alongside a SalSac agreement - and the cover it provides would be irrelevant (it's a benefit provided to the employee).

Whether ER and/or EE will be happy with the tax/nic consequences will depend on their expectations and priorities - so professional advice should be sought.

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