Statutory Payments - October 2008 changes to maternity and adoption leave rights

Written by Ian Congreave - Filed under: Maternity/Paternity/Adoption Pay & Leave on August 11th, 2008

UK Flag After some delay, the Regulations that will change the rules governing the application of terms and conditions during maternity and adoption leave came into force on 23 July 2008. The new provisions, as they relate to

maternity leave, apply only to employees whose expected week of childbirth begins on or after Sunday, 5 October 2008, i.e. those whose qualifying week starts on or after Sunday, 22 June 2008.
adoption leave, apply only to employees where the placement is expected to occur on or after 5 October 2008 (although the matching week, the week in which entitlement is checked, may be many weeks earlier).
adoption leave in respect of an adoption from abroad, apply where the adopter’s child enters the UK on or after 5 October 2008.

In cases of maternity, employers should not be misled, therefore, into thinking that the changes described only apply to periods of leave starting in October 2008. Employees whose baby is not due until on or after 5 October 2008 may already be starting their maternity leave. For example:

A woman’s baby is due on Tuesday, 7 October 2008. She informs her employer on Monday, 23 June that she is pregnant and provides her MAT B1 certificate. She starts her leave at the earliest permitted date, 20 July 2008, i.e. 11 weeks before the week in which the baby is due. The new rules apply to her leave.
A woman’s baby is born on Wednesday, 13 August 2008, eight weeks premature. She starts her leave on the following day. The new rules apply to her leave.

Similarly, in adoption cases, employees may start their leave before 5 October. For example,

A child is expected to be placed for adoption on Tuesday, 7 October 2008. The adopting couple are informed on Wednesday, 18 June that they have been matched with a child. The adopter who intends to take adoption leave tells the employer that she intends to start her leave on Monday, 29 September. The new rules apply to her leave.
Continuing Example 3, the child is placed eight weeks earlier than expected, on Wednesday, 13 August 2008. Adoption leave starts on that day. The new rules apply to the leave.

The new rules for both maternity and adoption leave are as follows:

During the full 52-week period of leave, i.e. both the first 26 weeks of ordinary leave and the second 26 weeks of additional leave, the employee is entitled to continue to receive all of the non-pay benefits that would have been provided if the employee had not been absent.
Where an employee’s terms and conditions require the employer to make contributions to the employee’s pension scheme, the employer must continue to do so (1) based on the employee’s earnings as they would have been if the employee were still at work, and (2) for the period of maternity leave for which either statutory or occupational maternity pay is paid. For example, where just SMP is being paid, this would be for up to 39 weeks, i.e. the 26 weeks of ordinary leave, plus the first 13 weeks of additional leave. Similarly, the employee is only required to make pension contributions during the period of paid leave.

Example: An employee’s normal monthly salary is £1,950. Before starting maternity leave, the employee makes regular monthly pension contributions of £97.50 (i.e. 5% of salary), and the employer’s contributions are £195 (i.e. 10% of salary). The employee takes the full 52 weeks’ leave, and is paid £405 per week for the first six weeks and £117.18 for the remaining 33 weeks. No payments are made for the final 13 weeks of additional leave. During the 39 weeks of paid leave, the employer must continue to make monthly pension contributions of £195, as if the employee were still at work and earning normally. The employee, however, is only required to pay 5% of £405 for the first six weeks, and 5% of £117.18 for the remaining 33 weeks.

Further information:
The Maternity and Parental Leave etc. and the Paternity and Adoption Leave (Amendment) Regulations 2008
Explanatory Memorandum to the Maternity and Parental Leave etc. and the Paternity and Adoption Leave (Amendment) Regulations 2008

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Written by Ian Congreave -

Filed under: Maternity/Paternity/Adoption Pay & Leave on August 11th, 2008