Furlough: parental pay to be calculated on usual earnings

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Furloughed workers taking parental or adoption leave will receive parental or adoption pay based on their usual earnings, not the lower rate they receive while on furlough.

Entitlement to statutory parental or adoption pay is usually calculated based on a worker’s average earnings over an eight-week period. However, as workers furloughed under the Coronavirus Job Retention Scheme are only entitled to 80% of their usual salary, this average is likely to be lower than what the employee would have received had they not been furloughed.

Parents who begin their period of family leave on or after 25 April will have their entitlement assessed on their usual, full pay, the government has confirmed. It will apply to those taking parental, adoption or parental bereavement leave.

“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,” said business minister Paul Scully.

“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.”

Lords minister for the Department for Work and Pensions, Baroness Stedman-Scott, said: “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.

“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.”

Earlier this month the government introduced a new right to up to two weeks’ paid leave for parents who lose a child under the age of 18. The new rules took effect on 6 April 2020.

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