2016 to 2017 Statutory Rates

Statutory parental payments and statutory sick pay are generally increased annually. However, there’s some good news on the 2016 to 2017 Statutory Rates for employers. What’s going to happen?

Budget announcement

When the Chancellor delivered his summer Budget 2015 he announced a four-year freeze on working-age benefits. However, to the disappointment of employers he went on to state that this freeze excluded all statutory parental payments, i.e. statutory maternity pay (SMP), statutory paternity pay (SPP), statutory adoption pay (SAP) and statutory shared parental pay (SShP). The Chancellor indicated that these statutory rates “would be up rated in the normal way, in line with the Consumer Price Index”

Now for the good news

To calculate the statutory rates for the 2016/17 tax year the government used the Consumer Price Index rate as it stood in September 2015, which over the course of the year had fallen to -0.1%. The net effect of this is that SMP, SPP, SAP and SShP will see no increases at all in the 2016/17 tax year. Instead, they all remain fixed at their current rate of £139.58 p.w. or 90% of the employee’s average weekly earnings, if this figure is less than the statutory rate.

Even more good news

During the 2016/17 tax year the weekly rate of statutory sick pay (SSP) will remain static at £88.45. Furthermore, the lower earnings limit – which is the minimum amount an employee must earn in order to qualify for SSP and the statutory parental payments detailed above – is unchanged at £112 p.w.

All the statutory rates for the 2016/17 tax year – which are set out in the Department for Work and Pensions’ proposal document – require Parliamentary approval, but this is only a formality.

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