New changes in SMP calculations

Discussion in 'Home Life & Finances' started by Helen, May 14, 2005.

  1. Helen

    Helen Well-Known Member

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    You may have heard about this case recently. Alabaster v Woolwich. This woman spent 9 years fighting the government for maternity pay to the tune of just over £200. Amazing principals or what?! There's quite a good write up of this case in the Telegraph here http://telegraph.co.uk/news/main.jhtml? ... alab04.xml

    As a result of this case the government has had to amend the legislation with regard to the way SMP is calculated. This legislation was implemented on the 6th April this year and goes by the rather catchy title of Statutory Maternity Pay (General) (Amendment) Regulations 2005.

    What does this mean for you, I can hear those who haven't nodded off yet saying? :)

    SMP is calculated by using an 8 week period to calculate your average pay. This 8 week period is roughly 15 weeks before your baby is due. What used to happen, and what happened to Alabaster, is that if you get a pay rise after that time, it's hard cheese really because your SMP was based on those 8 weeks. What happens now, is that if you should get a pay rise at any time after those 8 weeks before the end of your maternity leave, you employer must recalculate your SMP as though you were paid that salary during those 8 weeks.

    The amazing thing about this is, say for example you go on maternity leave at the beginning of January and get a pay increase now (May), they have to effectively give you that rise from January!! :shock: So the other poor saps who are at work whilst you are on maternity leave get theirs in May, but you get yours backdated!! :shock: Ha ha!!

    The reason that I am posting this on here is that despite pretty wide publicity on the case, it's not been made very clear to employers that they must change how they do things. Inland Revenue guidance for payroll staff is not clear on the subject. I've taken advice from our legal advisors to check this out because the backdating thing does seem a little odd.

    The other thing to watch out for is that there is some talk about this being applied retrospectively. In other words, if you have been on maternity leave in the past and had a rise, you may be entitled to more dosh!

    Hope this is useful to some of you.
     

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