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Volunteers can't claim childcare costs, says government

Finance | Ian Allsop | 13 Mar 2008

Volunteering England has expressed “deep concern” at the government’s statement last week that volunteers are not entitled to reimbursement of childcare costs.

The statement was contained in the publication of the Department for Business, Enterprise and Regulatory Reform (DBERR)’s response to its consultation on the minimum wage and voluntary workers. The report concludes that there is no need to change the law relating to the application of minimum wage rules to voluntary workers, despite complaints from charities that it prevents them offering incentives to volunteers.

Under the current law, in some circumstances volunteers who receive benefits can argue that they are entitled to the minimum wage. The consultation was aimed at reviewing the operation of section 44 of the National Minimum Wage Act, which provides exemptions from minimum wage having to be paid to voluntary workers in certain prescribed circumstances. These include when they receive no remuneration except actual out-of-pocket expenses or a reasonable pre-estimate of expenses, and no benefits in kind other than subsistence or accommodation.

DBERR has decided that the legislation is sufficiently clear and extra sections would “risk making it more, not less, problematic to resolve any disputes that might arise about employment status”.

It states: “Training provision beyond the needs of the volunteering opportunity, or reimbursement of childcare expenses, represent a significant benefit in kind and as such would change the nature of the relationship between voluntary worker and qualifying organisation.”

Volunteering England said it was surprised to see this as it was in stark contrast to recent legal rulings on the status of volunteers. It cited the 2003 case of South East Sheffield CAB v Grayson where the provision of childcare expenses alongside other out-of-pocket expenses was felt to be reasonable and did not amount to a benefit to the volunteers. That case concerned whether certain volunteers could be considered to be legally employed, the same issue that applies if the minimum wage were to be claimed by a volunteer. It also says that DBERR’s position is in conflict with the Department for Work and Pensions’ views on volunteer expenses.

Justin Davis Smith (pictured), acting chief executive of Volunteering England, said: “The reimbursement of childcare is not a benefit to the parent. They are incurring this cost as a direct consequence of volunteering. Expecting volunteers to be out of pocket through giving up their time places a significant barrier in the path of people on a low income who want to contribute to their community.”

Charity law specialists Bates Wells & Braithwaite said the government’s response is likely to disappoint many charities, as the opportunity has not been taken to address a number of points of practical concern.

“For instance, charities are unable to provide onsite childcare to voluntary workers without falling foul of the ‘no benefits in kind’ provision. Equally, charities cannot permit voluntary workers to arrange and pay for their own accommodation, overseas, for example, however much more convenient that would be than the charity having to provide the accommodation itself unless the voluntary worker has been engaged through a second charity.”

The government has promised to prepare new guidance in 2008 which may provide clarification of other points raised in the consultation, such as whether a charity can provide both subsistence and accommodation to a voluntary worker and still fall within the exemption, and how widely “out-of-pocket expenses” can be defined.

And it is considering the possibility of an exemption for full-time volunteering placements arising through v and Project Scotland, the schemes developed as part of the Russell Commission’s national framework for youth volunteering. The exemption would allow charities to offer inducements to under-25s to volunteer full-time without opening up the possibility that such voluntary workers could claim to be entitled to the minimum wage.

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