AWE for SMP | AccountingWEB


An employee has gone on maternity leave and is entitled to SMP only (90% of average weekly earnings - AWE). The trouble is the relevant period for working out the AWE happens to be a two month period when the employee was ill (with a pregnancy related illness) and so was only receiving statutory sick pay of less than a quarter of their usual earnings. This means they are only entitled to a fraction of the SMP they thought they would be receiving.

This seems grossly unfair but when we contacted HMRC they said it was "just bad luck" and that if she had received a large bonus during that period the SMP would have been based on this inflated AWE.

Apart from being unfair in the circumstance I've described surely this also leaves the whole system open to manipulation by timing bonuses for pregnant staff to fall into the relevant period for SMP calculation?

Has anyone else come across this and is there any way around it?

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dnicholson |