SMP and salary

SMP and salary

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I have come across a situation which I have never experienced before.

An employee has a contract that states she is entitled to her full regular salary whilst on maternity leave. This is somewhat unusual.

The employee qualifies for SMP.

Is she still entitled to SMP?

Thanks

 

Replies (16)

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By rjoconnor81
20th Apr 2016 13:49

Sort off

Based on the contract the employer must pay the full salary.  The employer can then reclaim the SMP bit from HMRC.  This is not paid in addition to the full salary.  Basically her monthly pay will be SMP + employer top up, up to the full salary.

 

 

Thanks (2)
RLI
By lionofludesch
20th Apr 2016 13:53

Agree

She gets SMP, calculated normally.

Any excess paid by the employer is irrecoverable.   

I would show the two parts separately to prove that she's been paid her statutory entitlement.

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Euan's picture
By Euan MacLennan
20th Apr 2016 14:08

Must pay SMP

The clue is in the name - Statutory Maternity Pay must be paid by law (assuming that she satisfies the qualifying conditions) and I agree with the Lion that you should show it separately on the payslip to prove that it has indeed been paid.

The balance of her normal salary is effectively Occupational Maternity Pay, which is payable under her contract of employment.

One other point.  Maternity leave lasts for up to 52 weeks.  SMP stops after 39 weeks, so if she is still on leave after 39 weeks, the employer will be funding the entire salary.

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By Alwaysreading
20th Apr 2016 14:15

Thanks

I assumed she would be entitled to SMP but some small alarm in my head just needed to check!

On the assumption that SMP was fine I was looking at SMP + top up to normal pay. 

Thanks for clarification.

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Replying to Duggimon:
By pullanl
25th Apr 2016 15:28

SMP and full salary

I agree with earlier posts that the employee must be paid Statutory Maternity Pay, if she qualifies, as a minimum and that she should not receive full salary plus SMP.  However, do bear in mind that the first 6 weeks of SMP is 90% of average weekly earnings (no maximum) and this can be much more than basic pay. This is because it is based on NI'able earnings paid (rather than earned) during the relevant period (used to calculate the average weekly earnings) up to the payday at the end of 15th week before the baby is expected.  It is not unheard of for women to plan their pregnancy around their annual bonus payment!  This would then provide them with average weekly earnings that are far in excess of their basic pay.  Therefore, the earlier advice of showing the woman's contractual entitlement and her SMP separately is an excellent idea.  Not only will this make it clear to the employee but it will also ensure that you reclaim the correct amount from HMRC.

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Replying to Hugh Simpson:
By mwngiol
25th Apr 2016 16:58

Never heard it called that before ;)

pullanl wrote:

It is not unheard of for women to plan their pregnancy around their annual bonus

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Replying to Hugh Simpson:
RLI
By lionofludesch
26th Apr 2016 16:43

Assumption

pullanl wrote:

It is not unheard of for women to plan their pregnancy around their annual bonus payment!  This would then provide them with average weekly earnings that are far in excess of their basic pay.  

There's a big assumption in there .......

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By rememberscarborough
20th Apr 2016 15:04

Scary that "maternity" pay

Scary that "maternity" pay has become such a minefield especially when you consider the rules about SPP, SAP etc. Trying to think about how the rules would work here if the women's partner opted to split maternity leave etc.

How long before solicitors start opening up full departments dealing with incorrect SMP etc on a par with PPI....

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Replying to Insolvency Practitioner:
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By NYB
20th Apr 2016 15:53

Miss selling

rememberscarborough wrote:

Scary that "maternity" pay has become such a minefield especially when you consider the rules about SPP, SAP etc. Trying to think about how the rules would work here if the women's partner opted to split maternity leave etc.

How long before solicitors start opening up full departments dealing with incorrect SMP etc on a par with PPI....

As an aside they are already flexing their muscles to do with mis selling of AE as PPI is drying up. Its supposed to be the next "big thing"

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RLI
By lionofludesch
21st Apr 2016 09:15

Mis-selling ?

How is it mis-sold ?

You have to have it and once you've got it, only then can you opt out.

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Replying to Murray Willson:
By Democratus
21st Apr 2016 09:38

The "scary" thing is...

lionofludesch wrote:

How is it mis-sold ?

You have to have it and once you've got it, only then can you opt out.

 

...that the employer failed to do due diligence on selecting the AE scheme, meaning the employees were "mis-sold" a pension. At least this was one of the sales scare tactics I encountered 3 years ago when AE became a thing.

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Replying to pauld:
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By NYB
21st Apr 2016 11:00

Miss Selling AE

Democratus wrote:

lionofludesch wrote:

How is it mis-sold ?

You have to have it and once you've got it, only then can you opt out.

 

...that the employer failed to do due diligence on selecting the AE scheme, meaning the employees were "mis-sold" a pension. At least this was one of the sales scare tactics I encountered 3 years ago when AE became a thing.

Yes. This kind of thing. if an employee is in financial bother it could be exactly as above. The employer must be able to justify why a scheme was chosen.  Three years on the scare stories are still out there. Apparently there are firms setting all this up. I have no idea whether this is just scare tactics or what. My source works alongside the TPR so is relatively clued up on this.

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RLI
By lionofludesch
21st Apr 2016 14:58

Nonsense

Never heard such nonsense.

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By Peerrob
22nd Apr 2016 11:44

When you were an IFA, you were forced to carry out full review of client's risk profile and have on file reasons for choice of particular product.

Now with the government involved, one can choose say NEST under AE and no need to worry about if good advice was given or not. What a contradiction.

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By pullanl
26th Apr 2016 18:27

SMP and full salary

It is more common than you might think.

I have come across this on a number of occasions on training courses I have presented as well as on our Technical Helpdesk which we run for our members. 

I was speaking at a conference once and one of the delegates said she had a pregnant female director on the payroll who had received a £1million bonus during the period used to calculate the SMP average!

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RLI
By lionofludesch
26th Apr 2016 19:47

My world

£1m bonuses are not something I'll be losing sleep over here on Planet Ludesch.

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