Statutory adoption pay (SAP)
This section explains who is entitled to SAP, what the entitlement is and the penalties for non-payment.
Contractual or statutory?
Statutory Adoption Pay (SAP) is payable to individuals who adopt and to one partner of a couple where a couple adopts jointly. It is up to the couple to decide which partner takes adoption pay/leave and which takes paternity pay/leave.
You are not obliged to pay any more than SAP. However if you choose to pay more than SAP, for example, through your own company’s adoption pay scheme, these payments can be offset against SAP. 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 SAP?
Both employees and temporary workers may be entitled to SAP, provided that they meet the following requirements to qualify for SAP:
- Be a person with whom a child is, or is expected to be, newly matched and placed for adoption under UK law;
- Have been continuously employed for at least 26 weeks for you into the Matching Week (MW);
- Have stopped working, or taken leave;
- Have average weekly earnings at or above the lower earnings limit, which applies at the end of the MW;
- Give you notice of when they expect your liability to pay SAP to begin at least 28 days beforehand. Where this is not reasonably practicable it must be given as soon as is practicable.
Entitlement to SAP will be confirmed by documentary evidence given to the employee/worker by the adoption agency. Only approved adoption agencies are able to issue this evidence, which will ensure that only those adopting a child through the approved process will be entitled to SAP. SAP cannot be paid without acceptable evidence.
How much is SAP?
SAP is payable for a period of 39 weeks.
SAP is the same rate as the standard rate for SMP or 90% of average weekly earnings if they are less than the Standard rate.
Employees/workers whose average weekly earnings are below the lower earnings limit for National Insurance Contributions will not qualify for SAP.
How long is SAP paid for?
Qualifying employees and workers are entitled to receive SAP for 39 weeks.
SAP cannot be paid for any week in which your employee does any work for you SAP will end if the employee dies or is taken into legal custody and will also be stopped if, after their child is placed, they start working for a new employer who did not employ them in their Matching Week.
Can I reclaim SAP?
Yes, the amount of SAP reclaimable from the Government is 92%. Employers qualifying for Small Employers Relief can reclaim the full amount of SAP paid plus compensation for the NICs paid on SAP. 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 SAP in two ways:
- By offsetting your SAP 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 SAP 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 SAP to an employee or temporary worker who meets the qualifying conditions, you will be liable for the following:
- Failure to pay SAP within the time allowed, a fine not exceeding £1,000 for any one offence;
- Failure to provide information required in connection with SAP; 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 SAP 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.