What is the current rate for Statutory Paternity Pay
(SPP)?
Employees are entitled to 2 consecutive weeks pay at the
following rates:
- Tax year 2009/10 £123.06
- Tax year 2010/11 £124.88
or 90% of the average weekly earnings; whichever is lower.
What is the current rate for Statutory Adoption Pay (SAP)?
Employees are entitled to up to 26 weeks pay, if the expected
date of placement is prior to 1 April 2007 and 39 weeks pay if the
expected date of placement is on or after the 1 April
2007. This is at the current rate for the tax year.
- Tax year 2009/10 £123.06
- Tax year 2010/11 £124.88
or 90% of the average weekly earnings; whichever is lower.
How do I check the amount of SSP recovered is correct on my
month end summary?
All employers are entitled to recover SSP under the Percentage
Threshold Scheme.
It doesn't matter if you are a small company or not.
To calculate if you are entitled to recover SSP, calculate 13%
of the total NIC liability for the company that month. If the total
SSP paid that month exceeds this 13%, anything above this threshold
may be reclaimed.
It is important to check this manually if you have one company
split over two or more separate ID numbers.
What are Keeping in Touch (KIT) days for people on maternity
leave?
Under current legislation, if a woman returns to work for any
time at all during
her SMP period she will lose her entitlement to SMP for that whole
week.
KIT days have been introduced to allow employees to keep abreast
of any changes or training, by allowing them to attend work up to
10 days during her SMP period. Provided the employee does not
exceed this limit her entitlement to a full weeks
SMP will not be affected.
- KIT days are to form part of the maximum 39 week entitlement
and are not in addition to it
- These days are optional and cannot be insisted upon by either
party
- KIT days must be taken as whole days, even if the employee only
comes in for
an hour
Payment for KIT days
As the employee is working under her contract of service for
these days she must be paid an agreed rate for attending
work. In most cases this will be at the employee’s normal rate
of remuneration.
It will not be acceptable to pay the equivalent hourly rate of
SMP as this will fall below the minimum wage.
Any remuneration paid for the KIT day can count towards the SMP
liability for that week, and equally the SMP can count towards the
contractual obligation for the KIT day.
An interesting quirk of KIT days is the benefit to an employer
if the employee returns to work early and hasn’t used all her KIT
days. It will enable them to reclaim up to two weeks SMP
against the contractual pay whereas previously no SMP was due as
soon as the employee returned to work.
Can an employee's Maternity Pay Period start on any day from
April 2007 onwards?
Women with an expected week of birth date of 1 April 2007 or
later will be entitled to start their SMP on any day of the
week. This has changed from having to start on a Sunday as per
previous rules.
This does not change the fact that an SMP week runs for 7 days,
and that entitlement to SMP for that 7 days can only be established
at the end of each week even if it’s paid in advance.
For example, where the MPP start date is a Tuesday the SMP weeks
run from Tuesday to Monday for 39 weeks. It is important to
remember this when calculating the last week SMP - if the
woman returns to work mid-week this now doesn’t automatically mean
she has lost her SMP entitlement to that week.
What is the current rate for Statutory Sick Pay (SSP)?
The weekly rate for SSP is:
- Tax year 2009/10 £79.15
- Tax year 2010/11 £79.15
There is a daily rate that you pay if your employee is not due a
full weeks Statutory Sick Pay. The daily rate is the weekly rate
divided by the number of Qualifying Days you use in a week.
You can pay Statutory Sick Pay for up to 28 weeks in either a
single Period of Incapacity for Work (PIW), or a Linked Period of
Incapacity for Work unless there is a change of circumstances. If
your employee's linked PIWs span 3 years you need to stop paying
Statutory Sick Pay regardless of whether or not you have paid the
28 weeks of Statutory Sick Pay.
What is the current rate for Statutory Maternity Pay
(SMP)?
Employees are entitled to up to 26 weeks SMP if the baby is due
prior to the 1 April 2007. For babies due on or after the 1
April 2007, employees are entitled to up to 39 weeks.
The first 6 weeks of payment are at 90% of the average weekly
earnings and the remaining weeks at the rate set by HMRC.
This rate is:
- Tax year 2009/10 £123.06
- Tax year 2010/11 £124.88
or 90% of the average weekly earnings; whichever is lower.
How do I calculate and pay a daily rate of SMP, according to
the new regulations from April 2007?
Employers will have the option of dividing the weekly rate by 7
to provide a daily rate that can be better aligned to the number of
days in the pay period.
It means SMP can be paid as odd days at the beginning and end of
a month. It does not mean that the number of days in the
month is simply multiplied by the daily rate.
Where the daily rate option is used to pay SMP, it is calculated
as the weekly rate divided by 7 multiplied by the number of single
days to pay, then rounded up to the nearest penny.
Any recovery of SMP for the previous month should be calculated
on the total SMP paid, not just on the full weeks.
It should be noted that the daily rate is only an option -
employers are not obliged to calculate SMP this way and cannot be
required to do so by their employees. SMP entitlement is
still due in full weeks. So, although employers might split a
week
(e.g. pay 2 days of the week in one month and the other 5 days of
that week in the following month) they DO have to pay the full
week. They can’t stop SMP part of the way through an SMP week. E.g.
if a woman comes back to work on a Monday and her SMP week goes
from Wednesday to Tuesday, she loses her entitlement to the
full week (unless she has KIT days left).
What are the additional changes to statutory payments and
leave from April 2007 onwards?
From the beginning of the 2007/08 yax year there are substantial
changes to the statutory rights of parents and adopting
parents. The important date to remember
is the 1 April 2007. The new rights will apply to employees
when:
- Their Week Baby Due (WBD) date is 1 April or later [SMP]
- Their partner’s WBD date is 1 April or later [SPP]
- Their expected date of placement for the child is 1 April or
later [SAP]
- Their partner’s actual date of placement is the 1 April or
later [SPP for adoption]
Therefore, apart from SPP in relation to adoption, all the new
entitlements could come into effect during the current tax year if
the baby is born early or a child is placed earlier than
expected.
This means it is possible for two employees to give birth on the
same day, with
one having the current set of entitlements and one having all the
new benefits. Unfortunately there is no provision for
employees with WBD dates on the wrong
side of the 1 April, even if they are out by just a day.
It should be noted that the main changes relate to SMP &
SAP - the only change to SPP is the option to introduce a
daily rate of pay.
Age Limits
Don't forget, from the 1 October 2006 the age limits on
statutory payments were removed. This means that anyone under the
age of 16 or over 65 may be eligible
for statutory payments as long as the other criteria are met.
As you can only adopt a child when both partners are over 21,
the removal of the lower age limit will not apply to SAP. There
could now be a case for SPP to be paid
to employees under the age of 16, but the software has never
restricted the SPP (because of the unlikely event of it happening)
there should be no problem in paying it.
What are the changes to statutory payments from April
2010?
Statutory Sick Pay
(SSP)
Where Average Weekly Earnings (AWE) are £97.00 or more, the weekly
rate is: £79.15
Statutory Maternity Pay
(SMP)
For the first six weeks: 90% of AWE.
For the remaining weeks: 90% of AWE or £124.88, whichever is the
smaller.
Statutory Paternity Pay
(SPP)
90% of AWE or £124.88, whichever is the
smaller
Statutory Adoption Pay
(SAP)
90% of AWE or £124.88, whichever is the
smaller
Please note: All of
the above changes will be applied automatically after your year end
restart
Small Employer’s Relief remains at £45,000
If you are entitled to Small Employer's Relief you should check
you have ticked this under 'Company' 'Alter Company Options'
What percentage of SMP paid can we recover?
All employers are entitled to recover at least 92% of SMP paid.
Small employers are entitled to reclaim 100% of the SMP plus an
additional 4.5% of the NI contributions paid on SMP.
You qualify for Small Employer's Relief (SER) if you paid or were
liable to pay total Class 1 NICs of £45,000 or less in the
previous tax year. If you satisfy these conditions you will need to
flag the Small Employers Relief field under Company, Alter Company
Options.