Furloughed workers planning to take paid parental or adoption leave will be entitled to pay based on their usual earnings rather than a furloughed pay rate.

Furloughed workers planning to take paid parental or adoption leave will be entitled to pay based on their usual earnings rather than a furloughed pay rate, the government announced on 24 April.

Entitlement to Statutory Maternity Pay, as well as the other forms of Parental or Adoption Pay, are currently calculated through someone’s average earnings over an 8-week assessment period. For Maternity Allowance, entitlement and the rate payable is also determined by looking at average earnings over a 13 week period.

The statutory instrument laid in Parliament today will ensure workers whose period of family-related pay begins on or after 25 April will be assessed on their usual, full pay.

The changes will ensure those intending to take time off following the birth, adoption, or death of a child will not see their entitlement to pay affected as a result of being furloughed in the wake of the impacts of COVID-19.

“Maternity and other forms of parental leave are pivotal times in people’s lives, and they should absolutely be protected from the impacts of COVID-19,” Business Minister Paul Scully said. “We are supporting workers and businesses in a way never seen before, in response to the unprecedented effects of COVID-19. These measures will ensure those on the Coronavirus Job Retention Scheme continue to receive the parental leave and pay they are entitled to.”

“At an already challenging time for families, peace of mind that they can rightly take time off and receive their full entitlement will provide much needed reassurance,” Lords Minister for the Department for Work and Pensions, Baroness Stedman-Scott said. “Throughout this health emergency we’ve taken unprecedented steps to help those affected make ends meet, and today’s new measures further extend vital financial support.”

Pregnant women and new mothers are entitled to take up to 52 weeks of Maternity Leave. Up to 39 weeks are paid. For women who qualify for Statutory Maternity Pay (SMP), this is paid at 90% of usual earnings for the first 6 weeks, followed by 33 weeks at the statutory rate (currently £151.20). Adoption Leave and Statutory Adoption Pay (SAP) are the same.

To be eligible for SMP or SAP, a person’s average weekly earnings must be at least equal to the Lower Earnings Limit (currently £120 per week) over a prescribed 8-week test period. A person’s earnings over this period are also used to determine the earnings-related rate of SMP or SAP for the first 6 weeks.

Maternity Allowance is a benefit paid to working mothers (including self-employed mothers) who do not qualify for SMP – this is worth up to £151.20 a week for up to 39 weeks. Entitlement to MA, and the rate payable, are determined by reference to 13-weeks earnings in a 66-week test period.

Statutory Paternity Pay is up to 2 weeks long and is paid at the lower of £151.20 per week, or 90% of average earnings.

Shared Parental Pay is up to 50 weeks long and is paid at the lower of £151.20 per week, or 90% of average earnings.

Statutory Parental Bereavement Pay is 2 weeks long and is paid at the lower of £151.20 per week, or 90% of average earnings.

To be eligible for Paternity, Shared Parental and Parental Bereavement Pay, a person’s average weekly earnings need to exceed the Lower Earnings Limit (currently £120 per week) over a prescribed 8-week test period.

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Karen Wilkinson works at London School of Finance and Law and writes articles on UK tax law for My Taxes Plus and other financial magazines.

 

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