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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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25th Feb 2013 21:28

Average pay

The average pay for SMP is calculated in the two months before the qualifying week, which is 15 weeks before the due date. It was made this far back to minimise the impact of pregnancy related illness. She must have had more than SSP in this time or she would be below the LEL and not qualify for SMP.

The impact is mostly in the first six weeks, although it could be up to £40 a week for the remaining 33 weeks.

There was another one the year SMP changed from 26 to 39 weeks. Due dates from 6th April onwards got 39 weeks total, due dates on 5th April or earlier got 26 weeks.

And I'm not aware of a way around it.

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