Q. When we have an employee on maternity leave (receiving SMP), we know when she receives a salary increase that we must go back and recalculate her average weekly earnings as if she had been on that increased salary when we calculated SMP in the first place. We have assumed this is the same when someone is on adoption leave (and receiving SAP). Can you confirm?
A: This is one of those things that ONLY affects Statutory Maternity Pay. You are correct in that a pay increase at any time in her maternity leave period means a recalculation of SMP (and paying any excess). So, for example, a salary increase in week 39 of the leave period means going all the way back to look at her average weekly earnings – in the 8-week relevant period. This is written to legislation and included in HMRC’s Statutory Payments Manual.
BUT, for any other child-related statutory payment (adoption, paternity etc), you only recalculate the payment if the pay increase was effective in that 8-week relevant period. This is also included in HMRC’s Statutory Payments Manual.