Statutory paternity pay (SPP)
This section explains who is entitled to SPP, what the entitlement is when it should be paid, when the entitlement ceases and how a business can reclaim the SPP it has paid out.
Contractual or statutory?
Statutory Paternity Pay (SPP) is paid weekly to new fathers or the partner or spouse of the child's mother, who qualify for it and who choose to take time off work to care for the child or support the mother.
You are not obliged to pay any more than SPP. However if you choose to pay more than SPP, for example, through your own company’s paternity pay scheme, these payments can be offset against SPP. If such a payment is included in the contract of employment then you will be obliged to make a payment so you should make sure that the details of the scheme are clear.
Who qualifies for SPP?
Both employees and temporary workers may be entitled to SPP (despite temporary workers not being eligible for paternity leave).
Employees/workers need to:
- Have (or expect to have) responsibility for the child’s upbringing;
- Be the biological father of the child or the mother’s spouse, civil partner or partner;
- Have worked continuously for 26 weeks leading into the 15th week before the week the baby is due, the Qualifying Week (“QW”
- Remain in continuous employment with you from the end of the QW up to the date of birth of the child;
- Intend at the start of the Paternity Pay Period to care for the child or support the mother;
- Have average weekly earnings* of at least the lower earnings limit for National Insurance purposes which applies at the end of the 15th week before the week the baby is due;
- Give you notice of when he expects the liability to pay SPP to in or before the 15th week before the week the baby is due. Where the employee / worker needs to vary the date on which they have chosen their SPP to begin, the employee needs to give his employer 28 days’ notice before the first day of the expected week of the child’s birth where the new date to begin SPP is the day of the child’s birth.
* Average weekly earnings are worked out over a period of at least eight weeks up to and including the last normal pay day on or before the Saturday of the 15th week before the week the baby is due. All the pay the employee/worker got in that period must be taken into account. Pay means earnings which are liable for Class 1 NICs, or earnings which would be liable if they were high enough.
Entitlement to SPP is by self-certification. The self-certificate must state that the employee/worker meets the eligibility criteria and give the relevant notice. HM Revenue & Customs have produced a standard self-certificate 'Statutory Paternity Pay and Leave: becoming a birth parent (SC3)', or you can produce your own form, providing it contains the required information.
A temporary worker will be entitled to receive SPP if he has worked continuously for 26 weeks leading into the 15 week before the week the baby is due. The rules relating to continuous service are similar to those for SMP.
Employees/workers who are adopting a child are also entitled to receive paternity pay for a child who is newly placed for adoption where the employee/worker is notified by an approved adoption agency of being matched with a child. When a couple adopt, they can choose which parent takes paternity pay and which takes adoption pay.
If you decide that your employee/worker is not eligible for SPP, you must inform them that they are not entitled to SPP in writing. A model form can be downloaded from HMRC.
How much is SPP?
The rate of SPP will be the same as the weekly standard rate of Statutory Maternity Pay (SMP) or 90% of average weekly earnings if they are less than the standard rate.
In the case of a multiple birth, entitlement to SPP is exactly the same as if there were one baby.
How long is SPP paid for?
You will pay SPP for a single period of either one or two consecutive weeks, depending on the length of paternity leave the employee/worker decides to take. SPP cannot be paid for more than two weeks.
SPP is a weekly payment due at the end of each SPP week. SPP weeks can start on any day. SPP cannot be paid for any SPP week in which the employee/worker does some work for you, or for any SPP week they are sick and entitled to get Statutory Sick Pay.
SPP will end if the employee dies or is taken into legal custody.
Employees/workers do not have to pay SPP back even if they do not return to work after their paternity leave.
Can I reclaim SPP?
Yes, the amount of SPP reclaimable from the Government is 92%. Employers qualifying for Small Employers Relief can reclaim the full amount of SPP paid plus compensation for the NICs paid on SPP. In order to qualify for Small Employers Relief the employer must have paid £45,000 or less each year in gross National Insurance contributions.
Under the Employment Act, you can recover SPP in two ways:
- By offsetting your SPP payments against any payments due to be made to the Inland Revenue;
- By applying for advance funding if the amount you are due to pay in SPP exceeds the tax, national insurance and other allowable payments due to be made to the HM Revenue & Customs.
What are the penalties for non-payment?
If you fail to pay SPP to an employee or temporary worker who meets the qualifying conditions, you will be liable for the following:
- Failure to pay SPP within the time allowed, a fine not exceeding £1,000 for any one offence;
- Failure to provide information required in connection with SPP; a fine not exceeding £1,000 for any one offence and a fine of up to £40 for each continued day of failure following conviction;
- Failure in keeping required records; a fine not exceeding £1,000 for any offence and a fine of up £40 for each continued day of failure following conviction;
Employers who provide false information relating to SPP will be liable on conviction to a fine of up £5,000 or a term of imprisonment of up to three months.
Disclaimer
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.