What is statutory paternity pay?

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Accepted Answer

## What is Statutory Paternity Pay?

### What the law says

Statutory Paternity Pay (SPP) is a statutory payment made under the **Social Security Contributions and Benefits Act 1992** (SSCBA 1992). It comprises two elements: **ordinary statutory paternity pay** and **additional statutory paternity pay**. SPP payments are treated as earnings for the purposes of National Insurance contributions, since section 4(1)(a) of the SSCBA 1992 directs that all such payments are to be treated as remuneration derived from employment.

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### HMRC guidance / practice

**Purpose**

SPP is intended to help employees take time off work to be with their new family by providing a measure of earnings replacement.

**History**

- SPP was introduced in **April 2003** alongside Statutory Adoption Pay (SAP).
- From **3 April 2011**, SPP was renamed Ordinary Statutory Paternity Pay (OSPP) and Additional Statutory Paternity Pay (ASPP) was introduced.
- From **5 April 2015**, OSPP was rebadged back as simply Statutory Paternity Pay (SPP), and Shared Parental Pay (ShPP) was introduced.

**Qualifying conditions**

To qualify for SPP, an employee must:
1. Have a **prescribed relationship** with the child and the child's mother;
2. **Stop working** for, or take leave from, the employer for the purpose of caring for the child or supporting the mother;
3. Have been **continuously employed for at least 26 weeks** continuing into the 15th week before the week the baby is due (the "qualifying week"), and from the end of the qualifying week to the date of birth;
4. Have **average weekly earnings of not less than the lower earnings limit** for National Insurance purposes at the end of the qualifying week; and
5. Give the employer **notice** of the date from which liability to pay SPP is expected to begin at least 28 days beforehand, or as soon as reasonably practicable.

**Duration and rate**

- SPP is payable for a **minimum of one week and a maximum of two weeks** (the Paternity Pay Period, or PPP).
- The weekly rate is the **lesser of the standard rate or 90% of the employee's average weekly earnings**.

**Tax and NIC treatment**

SPP is subject to deductions of **Income Tax and National Insurance contributions**, as well as other deductions that would normally be taken from wages (e.g. trade union subscriptions). It is **not** subject to attachment of earnings orders or Child Support Agency deductions from earnings orders.

**Employer responsibilities**

- Employers are responsible for administering the scheme and paying employees their entitlement.
- Employers must continue paying SPP until the end of the PPP even if the employment contract ends, unless the employee starts work for a new employer.
- Employers can **recover** either 92% of SPP paid, or 100% (plus compensation) if they qualify for Small Employers Relief.
- SPP entitlement does **not** affect an employee's entitlement to contractual paternity pay; an employer may offset one against the other.

**No entitlement** arises for any week in which the employee is in **legal custody**.

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