Statutory maternity pay and sick pay frozen for 2016/17

Statutory maternity pay and statutory sick pay rates will not rise in 2016. The Government has proposed no annual increase in various statutory rates, including maternity pay, paternity pay, shared parental pay, adoption pay and sick pay.

The current weekly rate of statutory maternity pay and other parental payments is £139.58, or 90% of the employee’s average weekly earnings if this figure is less than the statutory rate.

Although there is no statutory requirement to uplift these rates every year, they normally increase each April in line with the consumer price index (CPI). As the CPI fell by 0.1% in the year to September 2015, there will be no increase to the rates in 2016/17.

Bar Huberman, employment law editor at XpertHR says: “It will be a blow to many employees that these rates have been frozen. After the first six weeks of maternity leave, which are payable at 90% of the employee’s average weekly earnings, employees are entitled to 33 weeks’ statutory maternity pay at the weekly rate set by the Government.”

The freeze also applies to statutory shared parental pay. The amount of shared parental leave and pay to which parents are entitled depends on how much maternity leave and pay the mother takes and the amount of shared parental leave and pay taken by the other parent.

Employers can usually reclaim 92% of employees’ statutory maternity pay, paternity pay, adoption pay and shared parental pay.

The rate of statutory sick pay is also frozen at the current weekly rate of £88.45.

To be entitled to these statutory payments, the employee’s average earnings must be equal to or more than the lower earnings limit. This amount is also frozen at £112.