Repayment of maternity pay

Repayment of maternity pay

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I work with an organisation that has an enhanced maternity pay policy.  In other words it offers something better than SMP.  An employee eligible for the enhanced package has to provide a written commitment that they will return to work for at least 12 months after maternity leave.  In the event that they do not complete the 12 months, for any reason, then the company can ask the employee to repay the enhanced element of the maternity pay.  

In the event that an employee has to repay the enhanced element, should she repay it gross or net (the policy does not say)?  Is there a way of recovering the PAYE elements of the salary paid (for both the er and ee)? In which case the employee only has to repay net. In a nutshell, is there any way of processing a salary repayment, either though RTI or otherwise?  Thanks.

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Euan's picture
By Euan MacLennan
30th Jan 2015 10:44

Three questions

... so three answers:

NetNoNo

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By dlapish
30th Jan 2015 12:05

Crystal

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Euan's picture
By Euan MacLennan
30th Jan 2015 14:01

Unless ...

The thought occurs that as her entitlement to holiday pay continues to accrue while she is on maternity leave, you might owe her some accrued holiday pay.  If so, you could net off at least some of her enhanced maternity pay element.  I was assuming that she does not return to work after maternity leave, but if she does return to work, but leaves before 12 months, you would have a final month's pay against which to set off the enhanced pay element.  In that case, the three answers would be:

GrossYesYes, through RTI

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By dlapish
30th Jan 2015 15:09

Yes

I agree that if there is additional salary due then the reclaimed amount can be netted off that.  Otherwise it does seem a bit 'wrong' that her P45 will reflect that she has been paid the enhanced maternity pay even though she will have paid it back.  She cannot even reclaim it through her SATR.  Tough luck I suppose.

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