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Statutory adoption pay and leave: a guide - children due to be placed on or after 1 April 2007. Part 1/3

URN No: 08/809/A

Part 1

1. Introduction
2. What are the statutory adoption leave and pay entitlements and responsibilities?
3. Adoption Leave and Statutory Adoption Pay

1. Introduction

This guidance has been produced, following changes to legislation, to reflect entitlements to leave and pay when a child is placed for adoption.

The guidance covers adoption and paternity leave and pay entitlements, as they apply both to employers and to employees when a child is placed for adoption by an adoption agency within the UK and when a child is adopted from overseas.

For adoptions where a child is placed for adoption by an adoption agency within the UK, this guidance applies where the expected date of the child’s placement is on or after 1 April 2007. Where the expected date of placement is before 1 April 2007, the previous legislation and guidance will continue to apply (see “Adoptive Parents – rights to leave and pay when a child is placed for adoption within the UK”[1], for details.) This means that where the expected date of placement is, for example, 25^th March 2007, the employee and employer will be covered by the old legislation, not the new laws described in this guidance, regardless of when the adopted child is actually placed with the employee.

For adoptions where a child is adopted from overseas this guidance applies where the date the child enters the UK is on or after 1 April 2007. Where the child enters the UK before 1 April 2007 the previous legislation and guidance will continue to apply (see Adoptive Parents – rights to leave and pay when a child is adopted from overseas)

This is a guide to adoption leave and pay and paternity leave and pay following the amendments to legislation made by the Work and Families Act 2006 and consequent regulations. It gives general guidance only. It has no legal force and cannot cover every point and situation. It describes the position which applies in England, Wales and Scotland. In Northern Ireland corresponding legislation applies.

In England and Wales children may be adopted by couples who are married, civil partners or unmarried as well as by individuals. In Scotland children may be adopted by married or civil partner couples or by individuals.

Where a couple are adopting jointly they can choose which of them will take adoption leave and pay, and the other (regardless of gender) may take paternity leave and pay. If an individual is adopting they may take adoption leave and pay and their partner may be eligible for paternity leave and pay. Separate guidance on paternity leave and pay is provided for those employees (and their employers) whose wife or partner is expecting to give birth to a baby.

Overseas Adoptions

For practical reasons, some elements of the detailed operation of the adoption and paternity leave and pay schemes are different for those adopting a child from overseas. The differences relate to eligibility criteria, notice and evidential requirements to take leave and when leave and pay may begin. The different rules which apply where a child is adopted from overseas are set out in the section on overseas adoptions.

Other elements of the scheme, including terms and conditions during leave; return to work; keeping in touch and planning ahead are the same for both those adopting a child from overseas and those adopting a child from within the UK and are set out in the main sections of this guidance.

Rates of Statutory Adoption and Paternity Pay

The rates of Statutory Adoption and Paternity Pay are subject to revision each April. This means that the rate quoted in official guidance which is printed from the internet can become out of date. The internet guidance will be updated as and when the rates change; alternatively your local Jobcentre Plus office can advise you of the current rates.

Other Employment Legislation

While this guidance describes statutory adoption rights and obligations, employees who are adopting may also take advantage of other statutory rights which apply to all employees. These are mentioned in the text where relevant.

Adopters may be entitled to take parental leave and time off for dependants. These rights are summarised at 3. Employees who adopt children may also have the right to request flexible working

The Department of Trade and Industry has responsibility for employment legislation, including statutory adoption and paternity leave and pay. Her Majesty’s Revenue and Customs has responsibility for employers’ administration of Statutory Adoption and Paternity Pay. Direct links to detailed guidance is provided where appropriate.

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2. What are the statutory adoption leave and pay entitlements and responsibilities?

The statutory adoption and paternity rights described in this guidance form a minimum standard of protection established by Parliament. Employees and their employers, or their representatives, remain free to negotiate and agree more favourable arrangements on a voluntary or contractual basis should they wish to do so.

The Government welcomes and encourages this, where it accords with the priorities, needs and circumstances of the parties concerned. Where an employer and employee have agreed different arrangements, the employee will always be able to claim his statutory rights if these are better than those agreed with his employer, making a choice on a term by term basis if he wishes. This means that an employee cannot be bound by an agreement which offers adoption or paternity leave or pay arrangements that are not as favourable as the statutory rights.

Employees eligible for the rights

Most of the rights and responsibilities described in this guidance apply only to employees and not to the self-employed or to the unemployed (see guidance on employment status).

As a general rule, the following principles apply:

• To qualify for adoption or paternity leave an individual must be an employee (that is, work under a contract of employment);
• To qualify for statutory adoption or paternity pay an individual must be an employee or an employed earner (that is, must work for someone who is liable to pay the employer’s share of her Class 1 National Insurance Contributions (in case of doubt contact your local HMRC office)
• The vast majority of adopters who qualify for leave will also qualify for pay, and vice-versa. There are, however, a few exceptions which are indicated in the text where relevant.
• The rights relating to adoption and paternity leave do not apply to office holders, such as members of the police force, MPs, the judiciary and some company directors, or to masters or crew members engaged in share fishing paid solely by a share of the catch.

Other restrictions are explained in the text where relevant.

DEFINITIONS USED IN THIS GUIDANCE

Adopter

For the purposes of this guidance, an adopter is a person who has been matched with a child for adoption or, if the couple have been matched jointly, the member of the couple who has chosen to take adoption leave and/or SAP.

Adoption Agency

An adoption agency has the meaning given to it in section 2 of the Adoption and Children Act 2002 in England and Wales. In Scotland, it has the meaning given to it in section 1(4) of the Adoption (Scotland) Act 1978.

Matched / Matching

A person is matched with a child for adoption when an adoption agency decides that the person would be a suitable adoptive parent for the child, either individually or with another person.

Notification of matching

A person is notified of having been matched with a child on the date on which they receive notification of the agency’s decision that they have been matched with a child for adoption.

Official Notification

Before a child can be adopted from overseas the prospective adopter(s) must be assessed and approved by an adoption agency in the UK as being a suitable adoptive parent. The Central Authority for the UK (the DfES) sends a certificate of eligibility to the overseas authority concerned to confirm that the adopter has been assessed and approved. Official notification is the notification which the adopter receives confirming the Central Authority has issued and sent, or is prepared to issue the certificate and send the certificate.

Placement

A child is placed for adoption when the child goes to live with the adopter or adopters with a view to being adopted by them in the future.

Part-time employee

All the rights described in this guidance apply to both full-time and to part-time employees, no matter how many hours they work, provided that they satisfy any qualifying conditions, such as length of service.

Associated Employer

In this guidance two employers are “associated employers” if one is a company which the other directly or indirectly controls, or both are companies which are controlled by a third person.

Employees who work for more than one employer

Employees who work for more than one employer will be able to exercise their adoption or paternity entitlements – and will be subject to obligations – separately in relation to each. Employees should be careful to follow the notification for the start of leave, and notification for any change in return to work dates, for each employer.

Paternity

In this guidance the term ‘paternity’ is used in reference to those entitlements applying either to the individual who is the member of a jointly adopting couple who has chosen not to take statutory adoption leave or pay, regardless of the sex of either, or an individual adopter’s partner, regardless of the sex of either.

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3. Adoption Leave and Statutory Adoption Pay

ELIGIBILITY FOR ADOPTION LEAVE AND PAY

The details set out in this section apply only to those adopting a child from within the UK. The different rules which apply where a child is adopted from overseas are set out in the section on adoptions from overseas.

To qualify for adoption leave a person must be an employee (that is to say, they must work under a contract of employment).

The employee must:

• Have been matched with a child to be placed with them by a UK adoption agency;
• Have notified the agency that they agree that the child should be placed with them and agree the date of placement
• Have been continuously employed by the same employer for at least 26 weeks ending with the week in which they are notified of having been matched with the child. The week in question starts on a Sunday and ends on a Saturday. Continuous employment generally means working for the same employer without a break. For more information see Continuous Employment and a Week’s Pay
• Notify their employer of when they want to take their adoption leave no more than seven days after they are notified that they’ve been matched with a child.

To qualify for statutory adoption pay a person must be an employed earner (that is to say, they must be someone who is liable to pay the employer’s share of their Class 1 National Insurance Contributions) and must be earning at least the lower earnings limit to qualify for statutory adoption pay. In case of doubt contact your local HMRC office. For example, agency workers are usually treated as employed earners.

The person claiming statutory adoption pay must:

• Have been matched with a child to be placed with them by a UK adoption agency;
• Have notified the agency that they agree that the child should be placed with them and agree on the date of placement
• Have been in employed earner’s employment with the same employer continuously for at least 26 weeks ending with the week in which they are notified of having been matched with the child. The week in question starts on a Sunday and ends on a Saturday. Continuous employment generally means working for the same employer without a break. For more information see Continuous Employment and a Week’s Pay.
• Notify their employer of when they want to receive SAP at least 28 days before the date they want it to begin, or as soon as is reasonably practicable (notice can be given earlier alongside notice of the start of adoption leave); and
• Have average weekly earnings at or above the Lower Earnings Limit for National Insurance which applied at the end of the matching week (the Lower Earnings Limit is the amount an employee has to earn to qualify for benefits. An employee has to earn more than this amount before starting to pay National Insurance).

Employees may wish to use the model letter generated by the DirectGov interactive tool to give their employer the right notice.

If an employee is eligible for SAP but leaves their job for any reason – including being dismissed – they are still entitled to SAP. However, if they start work for a different employer they cannot receive SAP for any week in which they do work for the new employer.

If the employee’s contract ends before the SAP payments have begun, the SAP payments should start 14 days before the date of placement. If the contract ends during those 14 days, pay begins the day following the last day of work.

When Adoption Leave and Pay Can Start

The details set out in this section apply only to those adopting a child from within the UK. The different rules which apply where a child is adopted from overseas are set out in the section on adoptions from overseas.

An adopter can choose to begin their leave and pay on:

• The date on which the child is placed with them for adoption; or
• A pre-determined date no earlier than 14 days before the expected date of placement, and no later than the expected date of placement.

If the adopter has chosen to start their leave on the day the child is placed with them and they are at work on that day, the period of adoption leave and pay can start on the next day.

NOTICE FOR ADOPTION LEAVE AND PAY

The details set out in this section apply only to those adopting a child from within the UK. The different rules which apply where a child is adopted from overseas are set out in the section on adoptions from overseas.

Employees must give their employers notice of their intention to take adoption leave and pay. If an employee is entitled to both leave and pay the notice they give for leave can count for pay as well.

An employee must tell their employer that they intend to take adoption leave no more than seven days after the day they are notified of having been matched with the child or, if this is not reasonably practicable, as soon as is reasonably practicable. They can tell their employer earlier than this if they want to.

In most cases employees who are eligible for SAP will notify their employer of the date they want their pay to begin at the same time as giving notice of leave. In most cases employees will want their SAP to start on the same date as their leave. In any event, an employee must give the employer at least 28 days’ notice of the date on which they want their SAP to start, or, if this is not reasonably practicable, as soon as is reasonably practicable

An employee can change their mind about when they want their leave to start as long as they give their employer at least 28 days’ notice before the original date or the new date they want leave to start, whichever is later.

If the actual date of placement is earlier or later than expected

If the date of placement changes before the employee begins adoption leave, the employee should discuss the situation with the employer as soon as possible, and give the appropriate notice to change the start date (see above). If the employer and employee are unable to resolve any disagreement about the dates of adoption leave they should contact Acas (tel 08457 474747, www.acas.org.uk ). If the disagreement concerns pay, they should contact Her Majesty’s Revenue and Customs (tel 08457 143143).

Information and Evidence to be Provided to the Employer

The details set out in this section apply only to those adopting a child from within the UK. The different rules which apply where a child is adopted from overseas are set out in the section on adoptions from overseas.

The employee must tell the employer (this does not need to be in writing unless the employer asks for it):

• That they intend to take adoption leave and when they intend to start it; and the date on which they would like the SAP to begin, if eligible (this will often be the same date as the start of the leave);
• The date on which the child is expected to be placed for adoption with them.

The employer does not have to ask for evidence to show that the employee is eligible for adoption leave, but may do so if they wish. Evidence will be needed to demonstrate eligibility for SAP. The evidence that an employer is entitled to ask to see is:

• The name and address of the adoption agency;
• The date they were notified of having been matched with the child;
• The date on which the child is expected to be placed for adoption or, in the case of SAP, if it has already happened, the actual date of placement)
• For SAP, a declaration that the employee has chosen to receive SAP rather than Statutory Paternity Pay (SPP).

Any documentary evidence that the employer asks for should be given in the form provided by the adoption agency. The Government provides a matching certificate that may be used for this purpose and which can be used at the same time to fulfil the employee’s obligations in terms of giving notice for leave. In addition there is a model letter to make the declaration that the adopter has chosen to receive SAP. Both can be accessed from Business Link (see under ‘actions’. This is an external link).

Employees can of course opt to take less than the full 52 weeks’ leave if they choose to, as long as they give the employer at least eight weeks’ notice of their return to work. An employee who decides early on not to use all of their adoption leave is free to notify the employer of this as early as they wish, even if this is before they actually go on adoption leave. They will still be able to change their minds later, as long as they give notice see Keeping in Touch, Planning Ahead and Notice Periods for more on notice periods for changing adoption leave dates.

Employer Confirming Dates of Leave

Once the employee has provided notice of their intended start date of adoption leave, the employer should in turn notify the employee of the date on which their adoption leave will end. This will be 52 weeks after the start of adoption leave. The employer should give this notification of the date adoption leave will end within 28 days of receiving the employee’s notification.

Employers may use the model letter to do this.

Employers should note that if they do not inform the employee of their expected date of return to work, and the employee then returns to work on the incorrect day, the employer cannot begin disciplinary proceedings.

Although the date given by the employer in this notification will be 52 weeks after the start of adoption leave, employees can of course opt to take less leave than this if they choose to, as long as they give the employer at least eight weeks’ notice.

An employee who decides early on not to use all of their adoption leave is free to notify the employer of this as early as they wish, even if this is before they actually go on adoption leave. They will still be able to change their minds later, as long as they give notice (see Keeping in Touch, Planning Ahead and Notice Periods for more on notice periods for changing adoption leave dates).

If the employee has not given the correct notice the employer is entitled to delay the start of adoption leave and pay until the correct notice has been give. However, leave cannot be postponed beyond the date of placement.

TERMS AND CONDITIONS DURING ADOPTION LEAVE

There are two periods of adoption leave, Ordinary Adoption Leave and Additional Adoption Leave. There are some differences between the two, which are explained where necessary below. The two periods run consecutively.

Contractual rights to Adoption Leave and Pay

If the employee has a contractual right to adoption leave as well as their statutory right, they may take advantage of whichever is the more favourable. The rate of SAP to which the employee is entitled is the minimum which must be paid. If the employee also has a contractual entitlement to adoption pay for the same period in which they are also entitled to Statutory Adoption Pay which is more than the statutory amount, the employer must top up the statutory amount to the amount of contractual pay, If the amount of contractual pay is less than the statutory amount the employer must pay the statutory amount.

Terms and Conditions during Ordinary Adoption Leave

Ordinary Adoption Leave lasts for 26 weeks. The contract of employment continues throughout adoption leave (both ordinary and additional adoption leave), unless either the employer or employee expressly ends it or it expires.

During Ordinary Adoption Leave an employee has a statutory right to continue to benefit from the terms and conditions of employment, which would have applied had they been at work instead of on leave, except for the terms providing for the employee’s wages or salary.

Examples of contractual terms and conditions that will continue to apply during Ordinary Adoption Leave might include: any contractual holiday entitlement; participation in share schemes; reimbursement of professional subscriptions; the use of a company car or mobile phone (unless provided for business use only); and other perks such as health club membership.

However, if the employee does any of the limited amount of work allowed during adoption leave (see Keeping in Touch, Planning Ahead and Notice Periods) then it will be a matter for them and their employer to agree the amount of contractual pay for that work between them.

Continuous Employment

During her Ordinary Adoption Leave period an employee continues to be employed. This means that this period counts towards the employee’s period of continuous employment for the purposes of entitlement to other statutory employment rights (for example, the right to a redundancy payment). It also counts for assessing seniority, pension rights, and other personal length-of-service payments, such as pay increments under the employee’s contract of employment.

Guidance on the accrual of annual leave during both Ordinary and Additional Adoption Leave is provided at the end of this section.

Return to Work before, or at the end of, Ordinary Adoption Leave

When an employee returns to work from Ordinary Adoption Leave they have a right to return to the same job on the same terms and conditions as before the adoption leave began.

The employee is entitled to benefit from any general improvements to the rate of pay, or other terms and conditions, which may have been introduced for the grade or class of work while the employee was away, as if they hadn’t been away.

See Returning to the same job for more on returning from Adoption Leave.

Terms and Conditions During Additional Adoption Leave

Additional Adoption Leave lasts for 26 weeks and, if taken, must follow immediately after Ordinary Adoption Leave. There may not be a gap between the two types of adoption leave.

The contract of employment continues throughout Additional Adoption Leave unless either party expressly ends it or it expires.

During Additional Adoption Leave an employee does not have any statutory entitlement to receive remuneration from the employer. However, if the employee does any of the limited amount of work allowed during adoption leave (see Keeping in Touch, Planning Ahead and Notice Periods ) then it will be a matter for them and their employer to agree the amount of contractual pay for that work between them. In the absence of any agreement to the contrary, the terms and conditions of the employment contract which apply during Additional Adoption Leave are those set out below:

• The employee is entitled to benefit from the employer’s implied obligation to them of trust and confidence;
• The employee is bound by their implied obligation to the employer of good faith;
• The employee is bound by any terms in the contract relating to:
• • disclosure of confidential information;
  • acceptance of gifts or other benefits;
  • participation in any other business.
• The employee is entitled to receive whatever period of notice the contract provides for if the employment is terminated by the employer;
• The employee must giver the employer the notice provided for by the contract of employment if the employee is terminating the contract;
• The employee is entitled to any contractual rights to compensation if made redundant;
• Any terms and conditions in the contract of employment relating to disciplinary or grievance procedures will continue to apply.

The continuation of any other terms and conditions is a matter for negotiation and agreement between the employer and employee (or their representatives).

Continuous Employment

During Additional Adoption Leave an employee continues to be employed. This means that this period counts towards the employee’s period of continuous employment for the purposes of entitlement to other statutory employment rights. However, unlike Ordinary Adoption Leave, the Additional Adoption Leave period is not required to be counted for the purpose of assessing seniority, pension rights, and other payments based on an individual employee’s length of service – such as pay increases linked to length of service (unless the contract of service provides for service to accrue during Additional Adoption Leave for the purposes of contractual benefits). In these circumstances the period of employment before the start of Additional Adoption Leave will be ‘joined up’ with the period of employment on her return to work as if they were continuous and the period of Additional Adoption Leave disregarded.

OCCUPATIONAL PENSION SCHEMES DURING ORDINARY AND ADDITIONAL ADOPTION LEAVE

Employer Contributions

During any period of ‘paid adoption leave’ – regardless of whether this is Ordinary or Additional – an employer’s pension contribution should be calculated as if the employee is working normally and receiving the normal remuneration for doing so. ‘Paid Adoption Leave’ is when the employee is receiving Statutory Adoption Pay or contractual (occupational) adoption pay, or a combination of both. In other words, if an employee takes 26 weeks of Ordinary Adoption Leave followed by thirteen weeks of Additional Adoption Leave, returning to work when the period of Statutory Adoption Pay comes to an end, the pension contributions the employer makes should continue throughout the whole period as though the employee was working normally and had taken no adoption leave at all. However, if, rather than returning to work when the period of paid adoption leave came to an end, an employee remained on leave and used up the rest of their Additional Adoption Leave and was not paid for these final 13 weeks, the employer need not continue the pension contributions during the unpaid leave unless the contract of service provides otherwise.

Employee Contributions

If the rules of the pension scheme require the employee to contribute towards their occupational pension, the employee contributions should be based on the amount of pay they actually receive during the adoption leave period – whether Statutory Adoption Pay, contractual pay, or a combination of both.

ANNUAL LEAVE AND ADOPTION LEAVE

Employees on adoption leave retain their entitlement to statutory annual leave (four weeks’ paid leave per year) throughout ordinary and additional adoption leave. If the employee is also entitled to contractual annual leave (that is, annual leave that is provided by their contract, on top of the four weeks statutory minimum) they will continue to accrue this contractual entitlement during Ordinary Adoption Leave. The employee does not, however, continue accruing contractual annual leave during Additional Adoption Leave unless they have agreed otherwise with the employer.

It is not possible to take two forms of statutory leave at the same time. This means that it is not possible for an employee to take annual leave at the same time as adoption leave. It will, though, usually be possible for an employee to use any untaken annual leave either before they begin adoption leave, or once the leave has finished.

The employee could, for example, agree with the employer to take two weeks’ annual leave immediately before starting adoption leave. This would mean that the employee’s last day at work before adoption leave was actually two weeks before adoption leave began.

Employers and employees will often find it useful, once the employee has given notice of their intention to take adoption leave, to incorporate annual leave arrangements into their planning. This is particularly important if the employee plans to take a whole year’s adoption leave, as it is not possible to carry over statutory annual leave from one leave year to the next, or to pay the employee in lieu of any untaken statutory annual leave unless the contract is terminated. It is, of course, up to the employer and the employee to agree between them whether to carry over or provide pay in lieu of any untaken contractual annual leave above the statutory minimum.

STATUTORY ADOPTION PAY (SAP)

During adoption leave most employees will be eligible for SAP. This is a weekly payment made by employers for up to 39 weeks.

How to work out entitlement to SAP, how much to pay, and how to pay it

Employers should refer to the HMRC Helpbook E16 (“Pay and time off work for adoptive parents” or telephone 08457 646646) which explains in detail what they have to do to work out if the employee is eligible for SAP and how much to pay and when. There is also a supplement to this book which covers special cases. The guidance set out below is intended to provide an overview only and is not a substitute for the HMRC guidance mentioned above.

HMRC also provide online calculators to assist employers in working out whether their employee is eligible for SAP and how much should be paid. Alternatively the HMRC Employers Helpline can help with calculations. See http://www.hmrc.gov.uk/calcs/sap.htm or call 08457 143 143.

In order to claim SAP an employee must have given the employer sufficient notice and provided the information set out earlier in this section.

From 6 April 2008, Statutory Adoption Pay is paid at a rate of £117.18 per week or 90% of average weekly earnings if this is less. Please note that this rate is subject to review every April and may go up. If more than one child is placed for adoption with the employee on the same date the amount of SAP paid is exactly the same as if there were only one child. This is because SAP is intended to provide an element of wage replacement to enable the employee to take adoption leave, and is not a contribution towards child-care costs.

Once the employee has provided notification that they wish to receive SAP

Once the employee tells the employer that they wish to claim SAP, the employer must check that the employee satisfies the qualifying conditions.

The employer will need to work out the employee’s average weekly earnings in order to find out whether they qualify for SAP. Further information to assist employers in doing this is at www.hmrc.gov.uk/employers/tma-statpayments.shtml ; for a calculator see http://www.hmrc.gov.uk/calcs/sap.htm or call 08457 143 143.

SAP is a weekly payment due at the end of each SAP week (although the week can start on any day and then run for 7 days – eg from Wednesday to Tuesday). It is usually paid in the same way, and at the same time, as an employee’s normal wages would be paid.

SAP is treated as earnings so an employer should make any deductions that are due, such as income tax and NI contributions.

SAP cannot be paid for more than 39 weeks. It cannot usually be paid for any week in which the employee does some work for the employer, unless this work is done under the “Keeping in Touch” provision described in Keeping in Touch, Planning Ahead and Notice Periods. This allows up to 10 days to be worked without loss of SAP or without bringing the adoption leave period to an end.

Reclaiming SAP

Employers are able to reclaim 92% of the money they pay out in SAP from HMRC. If their National Insurance liability was £45,000 or less in the previous tax year they may reclaim 100% of the money they pay out, plus another 4.5% in respect of employers’ National Insurance contributions. Employers should contact the HMRC Employers’ Helpline (08457 143 143) for more information.

If the employee works for more than one employer

If the employee has more than one employer they may be entitled to SAP from each one. Employers should contact the HMRC Employers’ Helpline on 08457 143 143 if they are in any doubt.

Disputes over SAP

If an employee disagrees with their employer’s decisions about their entitlement to SAP and this cannot be resolved between employer and employee, the employee may ask HMRC for a decision. The employee should contact the local HMRC office.

OTHER ENTITLEMENTS

There are a number of other statutory entitlements which employees or their partners may be able to take advantage of. Separate guidance is provided on each of these, but in summary, they include:

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