Statutory Adoption Pay, Leave & Pension Contributions

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Statutory Adoption Pay and Leave can often seem particularly complex. This article provides a clear explanation of rights and responsibilities of employers relating to adoption pay, leave and pensions. As an employee it is equally as important to understand your entitlements and responsibilities in ensuring you receive the correct employee benefits.

Statutory Adoption Pay (SAP)

Statutory Adoption Pay (SAP) almost reflects the rules of Statutory Maternity Pay (SMP). For those who qualify for SAP the ‘Main Parent’ will be entitled to the following:

52 Weeks Statutory Adoption Leave (SAL)
39 Weeks Paid SAP
- 6 weeks at a rate of 90% of their gross average weekly earnings
- 33 weeks at a rate of £184.03 a week or 90% of their gross average weekly earnings (whichever is lower)
10 Keeping-In-Touch (KIT) days
Dependent on company policies employees may be given enhanced Adoption Pay. If this occurs, employers are only entitled to make a recovery from HMRC of the SAP amount, not any enhancement payments.

Recovering SAP as an employer

SAP can be reclaimed at the following rates:
- 92%
- 103% (if you qualify for small employers’ relief)

The remainder of any SAP due must still be paid even if the employer stops trading and tax and NI deductions apply as normal to SAP payments.

To be eligible for SAP an employee must:

have been continuously employed by you, as their employer, for at least 26 weeks up to the date they were matched with the child,
provide proof of the adoption,
give the correct notice,
ensure average weekly earnings within their relevant period are a minimum of £123 per week.

SAP can be refused to those who do not qualify and an SAP1 form must be issued within 7 days of this decision, which must be within the earlier of: 28 days of the employees request for SAP or the date they were matched with the child. Reasons an employee may not qualify for SAP, other than their earnings being too low, may be found on the Gov.UK website.

Statutory Adoption Leave (SAL)

To qualify for Statutory Adoption Leave (SAL) an employee must be classed as an employee and give you the correct notice. Proof of the adoption or surrogacy does not have to be given to the employer, unless requested.

Like Statutory Maternity Leave, the employee’s employment rights are protected during SAL.

In cases of a UK adoption, SAL can start from the following:

When the employee has been matched with a child for placement.
The date the child starts living with the employee or, 14 days prior to this date.

For overseas adoptions, leave can start from the following:

When the child arrives in the UK or up to 28 days prior to this date.

For parents in a surrogacy arrangement, leave can start from the following:

The day the child is born or the day following this.
Once the SAL start date has been agreed, should the employee wish to amend this they must give you, the employer, notice by the earlier of 28 days prior to their original start date or the new SAL start date they want. If the employee wishes to return from SAL earlier than agreed, they must give you 8 weeks’ notice.

Should the employer amend the start date and/or end date, the employee must have written confirmation that the dates have been amended.

If an employee resigns whilst in receipt of SAP or tells the employer they do not wish to return after their SAL, the employee may still be entitled to receive the full 39 weeks SAP. However, if the employee starts working for another employer, who they were not employed with during their Matching Week, their SAP payments will cease with the previous employer from the week they started their new employment. It is the employee’s duty to notify of any new employments during their SAP period, and this should be made clear in employee policies or contracts of employment.

What happens to employees’ pension contributions during SAL?

Non-Salary Sacrifice Pension Arrangement:

Employees eligible for Statutory Adoption Pay (SAP) receive full employer pension contributions during the 39 weeks of paid leave, based on their ‘usual’ salary. Those qualifying for Statutory Adoption Leave (SAL) receive full contributions for the first 26 weeks. If the employer offers enhanced adoption pay, their usual pension contributions must be maintained during this period.

The employee’s contribution will be calculated at their usual % rate, based on any pensionable pay received (including SAP) in each period.

Whether your employer contribution continues after the SAP period is a grey area, we would recommend seeking the advice of a pension specialist if your pension scheme rules do not confirm.

Salary Sacrifice Pension Arrangement:

For employees on salary sacrifice, the pension agreement must be maintained throughout the 52-week SAL period. If the employee cannot cover their ‘usual’ pension contribution due to limited pay, the employer must cover the full or partial amount to ensure the full combined employee and employer contributions continue. Statutory payments cannot be sacrificed, but enhanced adoption pay can be used to cover contributions if it allows.

More guidance on how to ensure your pension contributions are calculated correctly during a period of statutory leave can be found in our statutory leave article.

Should you have any questions for the team concerning adoption pay, leave or pensions please use the form below to contact one of our experts who can provide advice specifically tailored to your situation.

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Price Bailey · Statutory Adoption Pay, Leave & Pension Contributions

We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.

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