Payroll Update On Statutory Parental Bereavement Pay And LeaveBack
HMRC has recently updated the guidance on employee circumstances affecting payment of Statutory Parental Bereavement Pay, to confirm that Statutory Parental Bereavement Pay (SPBP) is not available to all employees who live in Northern Ireland.
This means that employees living in Northern Ireland are not eligible for SPBP if they have a contract of employment made under the Employment Rights (Northern Ireland) Order 1996. However, employees in Northern Ireland who are employed by companies in Great Britain, with a contract made under the Employment Right Act 1996, may be eligible, as long as all qualifying conditions are met.
Bereavement leave is a devolved matter in Northern Ireland, so changes require the approval of Stormont, the Northern Ireland Assembly.
What Is Statutory Parental Bereavement Pay And Leave?
Introduced in April 2020, the beginning of the tax year, Statutory Parental Bereavement Pay (SPBP) and Parental Bereavement Leave (PBL) offer a new right to two weeks of leave and, under some conditions, two weeks of pay, for working parents who lose a child under the age of 18, or who suffer a stillbirth after 24 weeks of pregnancy.
'Statutory' refers to the legal minimum an employer must give under the law. A persons contract of employment may offer more generous provisions in these circumstances but they cannot legally offer anything less generous, regardless of what is in the employment contract.
This right will apply to the:
- Biological parent
- Adoptive parent (if the child was living with them)
- Intended parent (due to become the legal parent through surrogacy)
- Guardian who lived with the child and had responsibility for them, for at least four weeks before they died
- Partner of the child’s parent (if they were living with the child)
Statutory Parental Bereavement Leave is available to parents who are classed as employees and is available to employees from the day that they start at their job. The leave can be taken at any time in the 56 weeks following the death of the child.
If more than one child dies, the employee is entitled to two weeks’ Statutory Parental Bereavement Leave for each child.
Statutory Parental Bereavement Pay is available to parents who were employed by the company when their child died, as long as they have worked for the employer for at least 26 weeks on the Saturday before the child’s death. To be eligible for SPBP, parents need to earn on average at least £120 per week, before tax.
How Much Is Statutory Parental Bereavement Pay?
Eligible employees and workers will receive one of the following, whichever is lower:
- £151.20 a week
- 90% of their average weekly earnings
There are a number of conditions that affect how much SPBP an employee will get. If an employee receives a backdated pay raise that increases the amount of earnings already paid during the relevant period, employers must recalculate the employee’s Average Weekly Earnings (AWE), and then pay any extra SPBP due. If they were previously not entitled to receive SPBP, the AWE calculation can be used to establish whether or not they are now entitled to the payment.
An employee’s AWE must be recalculated if:
- Their AWE is less than the Lower Earnings Limit (LEL) which was in force at the end of the assessment period
- They received expense payments of benefits in kind during this period
- Any expenses or benefits were included in a PAYE settlement agreement
For employees that have entered into a salary sacrifice arrangement with their employer, their AWE must be calculated according to the amount of earnings that they have actually been paid, and SPBP must be paid in its entirety.
Employees Furloughed Under The Coronavirus Job Retention Scheme (CJRS)
For those employees currently furloughed, who have been paid with help from the CJRS, the rules are slightly different. The rules apply for any employees whose period of statutory pay begins on or after 25 April 2020 and are designed to ensure that employees’ eligibility for SPBP is not affected when their wages are lower because they are furloughed.
In this case, earning used to work out their AWE for the part of the eight-week period that they were furloughed will be the higher of:
- What they actually received from their employer
- What they would have received from their employer had they not been on furlough
If it is not obvious how much an employee would have received, employers may use the reference salary used to determine how much they would receive through the CJRS
Other payments that should be considered during the relevant period include:
It will not be necessary to make changes to how the AWE is worked out if the business is using the CJRS but also topping up wages to full pay at their own cost. In this case the employee’s wages remain what they would have been receiving at full pay, and the AWE can be calculated as normal.
Bereavement Pay And Leave In Northern Ireland
Whilst the updated guidance remains for the time being, DUP Minister Diane Dodds has spoken out about plans designed to bring Northern Ireland’s laws into line with the rest of the UK.
The Minister said: "Whilst much of our energy at the moment is concentrated on our response to the COVID-19 pandemic, it is important that we also progress other priorities.
"I believe that employment law should be compassionate and supportive of parents who find themselves facing this distressing situation.
"Since taking office I have been very keen to put in place provision for Parental Bereavement Leave and Pay legislation in Northern Ireland so that parents can access this support if they need it. Under my proposals workers who suffer the loss of a child will have a statutory entitlement to two weeks’ leave and, in most cases, a statutory payment.
"After securing the agreement of the Executive, and subject to the views of my departmental Committee, I will be launching a public consultation to seek views on my proposal.
"The views of stakeholders and the wider public are very important, and I want to make sure we take them into account as we commence the legislative process."
In this uncertain economic period employees are worried about their job security and employers are worried about their long term viability, and the government is worried about bot. Seemingly every other week they announce a support package for businesses or new laws to help workers.
Navigating through all these changes and understanding what your current duties are as an employer can be tricky, if you need help or advice then TFMC are here to help.
Please contact us on 0800 470 4820 or email firstname.lastname@example.org to find out how we can be of assistance.