The government has published the proposed statutory rates for maternity pay, paternity pay, shared parental pay, adoption pay, parental bereavement pay and sick pay, effective from April 2021. Statutory rates normally increase each April in line with the consumer price index (CPI).

The percentage increases this year are lower than in recent years, which is likely to be as a direct result of the coronavirus pandemic.

To be entitled to any of these statutory payments, the employee’s average earnings must be equal to or more than the lower earnings limit. However, this has not yet been confirmed for the 2021 rates.

The new rates

The current weekly rate of statutory maternity pay is £151.20, or 90% of the employee’s average weekly earnings if this figure is less than the statutory rate. The rate of statutory maternity pay is expected to rise to £151.97 from April 2021. The increase normally occurs on the first Sunday in April, which is 4th April.

Sunday 4th April 2021 also sees the first annual increase for statutory parental bereavement pay. This follows the introduction of the right to parental bereavement leave, available to the parents of a child who died on or after 6th April 2020.

Also increasing on 4th April 2021 are the rates of statutory paternity pay and statutory shared parental pay, which are expected to rise from £151.20 to £151.97 (or 90% of the employee’s average weekly earnings if this figure is less than the statutory rate).

The rate of statutory adoption pay increases from £151.20 to £151.97. Statutory adoption pay is payable at 90% of the employee’s average weekly earnings for the first six weeks, with the remainder of the adoption pay period at the rate of £151.97, or 90% of average weekly earnings if this is less than £151.97.

The rate of statutory sick pay is also expected to increase from £95.85 to £96.35 on 6th April 2021

Organisations now have time to plan for these increases, alongside the recently announced increase to the national minimum and national living wage, effective from 1st April 2021.  These new rates are set out below:

 Category Current rate Rate from April 2021 Percentage Increase
National Living Wage – 23 years & older £8.71 £8.91 2.2
21-22 year old minimum rate £8.20 £8.36 2.0
18-20 year old minimum rate £6.45 £6.56 1.7
16-17 year old minimum rate £4.55 £4.62 1.5
Apprentice minimum rate £4.15 £4.30 3.6
Accommodation offset rate £8.20 £8.36 2.0

It should be noted that the Chancellor confirmed, as part of the Spending Review, that the Government would be adopting the recommendations of the Low Pay Commission to increase the National Living Wage and National Minimum Wage with effect from April 2021. In addition, the Government will also extend the National Living Wage so that it will apply to those who are 23 years of age or older (previously it applied to those who were 25 years or older).

This article is part of the MAD-HR Employment Law content hub archive.

Click here to get the latest update on the National Living wage.