SDWorx-Pay – Statutory Paternity Pay (SPPA) Adoption

STATUTORY PATERNITY PAY (ADOPTION) (SPPA)

Name	Data code
SPPA Eligibility Indicator	M000
Date of Matching Certificate	M010
Actual Date of Placement	M014
Start Date of Adoption Pay Period (APP)	M020
Number of Weeks SPPA Remaining to be Paid	M340
Number of Weeks SPPA Paid to Date	M360
Number of Weeks SPPA to be Paid for Payroll Adjustment	M365
Replace Average Earnings	M703
Weekly SPPA ’Earnings Related’ Rate	M704
SPPA Increase this Payrun Only	M731
SPPA Decrease this Payrun Only	M732
Positive Pre-Determined SPPA this Payrun Only	M735
Negative Pre-Determined SPPA this Payrun Only	M736
SPPA Total to Date Paid in Current Year	M738

Statutory Paternity Pay (Adoption) (SPPA) and Paternity Leave is a scheme for parents to receive parental pay and leave from employers.

SPPA is available to adoptive parents where a certificate matching them with a child for adoption is issued. However, SPPA can only be paid when the child has been placed since 6th April 2003. An employee (male or female) is eligible for SPPA if the following are true:

The employee is one member of a couple adopting a child together

NOTES.

When a couple is adopting a child, if one partner is eligible for Statutory Adoption Pay (SAP), the other may be entitled to SPPA.
1. Until 2004, only married couples can adopt a child together.
The employee has been employed continuously for 26 weeks up to and including the Matching Week (MW) • Average weekly earnings over the 8 weeks up to and including the MW must be equal to or more than the LEL

SPPA payments and leave cannot start before the child has been placed and cannot continue later than the 56th day after the child was placed.

SPPA can only be taken in a single period of either one or two weeks leave. It must be taken in whole weeks but a ‘week’ can start on any day of the week.

Payroll Active checks the length of time of employment with the company, and calculates the employee’s average pay to determine the SPPA rate.

To pay SPPA to an employee, Payroll Active requires you to enter:

the date of matching certificate (using Date of Matching Certificate/M010)
the actual date of placement (using Actual Date of Placement/M014)
the start date of APP (using Start Date of Adoption Pay Period (APP)/M020)
and number of weeks SPPA to be paid (1 or 2) (using Number of Weeks SPPA Remaining to be Paid/M340).

In accordance with HMRC rules, SDWorx-pay calculates the employee’s average pay over the 8 weeks from and including the matching week (providing it is a payment week):

For a weekly payroll, Payroll Active adds the pay for the matching week and the previous 7 pay periods and divides by 8 to obtain the average weekly pay.
For a fortnightly payroll, Payroll Active adds the pay received in the matching week to that of the previous 3 pay periods and divides by 8 to obtain the average weekly pay. If the matching week is not a paying week, Payroll Active adds the pay of the previous 4 pay periods.
For a lunar payroll, Payroll Active adds the pay received in the matching week to that of the previous pay period and divides by 8 to obtain the average weekly pay. If the matching week is not a paying week, Payroll Active adds the pay of the previous 2 pay periods.
For a monthly payroll, Payroll Active adds the pay received in the matching week to that of the previous pay period, multiplies by 6 and divides by 52 to obtain the average weekly pay. If the matching week is not a paying week, Payroll Active adds the pay of the previous 2 pay periods.

To be eligible for the SPPA, the employee must have worked continuously for at least 26 weeks up to and into the matching week, and have an average pay above the Lower Earnings Limit (LEL).

SPPA rates for Adoption Pay Periods starting on or after 6th April 2003 and which are reviewed by the DWP each year, are:

Up to two weeks SPPA at 90% of average weekly earnings or the standard rate, whichever is the lower.

PRE-DETERMINED AVERAGE EARNINGS AND PAYMENTS

If for some reason, the employee’s calculated average pay cannot be used by Payroll Active, you can enter a pre-determined average earnings on which SPPA payments will be based using Average earnings replacement/M703. Payroll Active will use this replaced average earnings to calculate a new weekly SPPA rate. You can also change the rate, using Weekly ’Earnings Related’ rate/M704.

You can also enter pre-determined SPPA payments, in which case you must enter these payments throughout the period of payment and not revert to automatic calculation. To enter these payments use Positive pre-determined SPPA amount/M735 and Negative pre-determined amount/M736.

PAYING SPPA

SPPA is automatically paid into allowance number 70, which is reserved for parental payments, unless you set up a separate allowance for SPPA. The details of this allowance are defined at company set-up time, including the number of the reducing allowance against which SPPA can be offset (for example, the basic pay allowance, number 01).

If the reducing allowance is less than the SPPA payment calculated by Payroll Active, the allowance is defined at company set-up time to be set to zero or allowed to become negative. If set to zero, displays WARNING – SPPA ROUNDING on the Exception Report.

Payroll configuration can be specified that if the balance of the reducing allowance is less than the SPPA amount, the employee’s basic pay will be reduced also.

If the reducing balance is defined at company set-up time to be the basic pay allowance (number 01), the basic pay will become negative if the basic pay is less than the SPPA amount.

The calculated amount of SPPA is printed on the payslip and is shown as a separate amount, and if specified, shown as offset against the nominated allowance.

The SPPA allowance will be zeroised in accordance with the company calendar specified for the allowance at company set-up time.

If Payroll Active accepts the values you enter against SPPA data codes but does not calculate a payment, it will print a warning message on the Exception Report that explains why payments have not been calculated.

From the SPPA start date (held against Start Date of APP/M020) all allowances (including basic pay), deductions and pension contributions continue to be processed as normal until they are stopped or adjusted.

The total SPPA paid to-date in the current tax year is held against SPPA total paid in current tax year/M738. This is cleared down at the end of each tax year.

WEEKS PAID AND WEEKS REMAINING

Payroll Active requires you to enter the number of weeks paid and the number of weeks remaining of the employee’s entitlement. You can however, replace any of these using:

Weeks remaining to be paid/M340
Weeks SPPA paid to date/M360

SIGNED INPUT

You can enter positive or negative cash amounts against some of the SPPA payroll items, by preceding the amount with a positive or negative sign. If you enter no sign, a positive amount is assumed. These are the items:

SPPA increase/M731
SPPA decrease/M732
Positive pre-determined SPPA amount/M735
Negative pre-determined SPPA amount/M736

Note the effect of entering a negative amount against:

SPPA increase/M731
SPPA decrease/M732
Positive pre-determined SPPA amount/M735
Negative pre-determined SPPA amount/M736

is to reverse the effect; that is, an increase becomes a decrease, and a decrease becomes an increase.

NOTE. Negative values are not accepted against the following items:

Average earnings replacement/M703
Weekly SPPA ’earnings related’ rate/M704
SPPA total paid in current tax year/M738

CORRECTING ERRORS AND PAYROLL ADJUSTMENT

There are several ways in which you can correct SPPA errors:

By entering positive or negative pre-determined payments (using Positive predetermined payment/M735 or Negative pre-determined payment/ M736). Once you enter a pre-determined payment, you must continue to pay SPPA in this way for the rest of the Adoption Pay Period.
By increasing or decreasing the SPPA by a specified amount for this payrun only, using SPPA increase/M731 or SPPA decrease/M732. In this way you can pay or recover an amount of SPPA without affecting the number of weeks paid or weeks still to be paid.
By entering weeks to be paid for payroll adjustment, using:
- Weeks to be paid for payroll adjustment/M365
- together with a positive or negative amount (using Positive pre-determined payment/M735).

Note that you do not use Negative pre-determined payment/M736 in payroll adjustment.

Payroll adjustment differs from the other methods of correcting errors by producing a separate payslip, and allowing you to reverse the previous pay period (using Previous period reversal/E072).

If as a result of payroll adjustment, the number of weeks paid exceeds 2, Payroll Active prints _{ERROR – NOT ENOUGH WEEKS SPPA LEFT} on the Exception Report.

All payroll adjustment data must be entered only from a Payroll Adjustment screen or by using a form-type CD. Refer to Appendix E for a list of payroll adjustment items.

None of these methods allow you to correct errors made in the current payrun.

NOTE:

The following reports and documents can be affected as a result of managing SPPA:

Input Error Report
Exception Report
End of Year Tax Returns
Financial Summary
SPPA Payments Report
SPPA Entitlement List See
EMPLOYEE, for the following details:
- Sex/E041
- Basic period hours/E058
- Dormant indicator/E067
- Pay manual adjustment/E070
- Previous period reversal/E072
- Birth date/E080
- Start date/E081
- Leaving date/E082
ALLOWANCES, page ALL-1, for information about managing allowances.

SPPA PAYROLL ITEMS

SPPA ELIGIBILITY INDICATOR

M000

Payroll Active always sets this indicator to Y or N. Use M000 to re-set the eligibility of an employee to receive SPPA payments.

Format

Y or N.

Example

The employee is to become eligible to receive SPPA payments: M000 Y

NOTE:

After you have entered a date of matching certificate (using Expected date of Matching Certificate/M010), Payroll Active determines the matching week, then performs two checks:

It checks the employee’s start date (held against Start date/E081) to ensure that the employee has worked for the company for at least 26 weeks up to and including the matching week. If not, it displays EMPLOYEE INELIGIBLE FOR SPPA – SERVICE TOO SHORT on the Exception Report.
- It calculates the employee’s average pay to ensure that it is not below the LEL. If it is, Payroll Active prints INELIGIBLE FOR SPPA – AVERAGE PAY BELOW LEL on the Exception Report.

If both conditions are satisfied, Payroll Active sets the eligibility indicator to Y. If either or both are not satisfied, Payroll Active sets it to N.

Use M000 to re-set the eligibility indicator to Y to pay the employee pre-determined SPPA amounts, and N to stop any further SPPA payments.

DATE OF MATCHING CERTIFICATE	M010

ACTUAL DATE OF PLACEMENT	M014

Use M010 to enter the Date of Matching Certificate.

Use M014 to enter the actual date of Placement.

Format ddmmyyyy

Where dd is the day, mm is the month and yyyy is the year.

NOTE. Enter /B after the date to indicate SPPA.

Examples

The date of Matching Certificate is 8th April, 2003:

M010 08042003/B

The actual date of Placement is 10th April, 2003:

M014 10042003/B NOTE:

Paternity leave can only be taken in whole weeks but a ‘week’ can start on any day of the week after the date of matching certificate.
Enter 8 zeroes to clear the date of matching certificate.
Having entered the date of matching certificate, Payroll Active then checks that the employee is eligible:
- If there is no start date for the employee (using Start date/E081), Payroll Active prints ELIGIBILITY NOT CHECKED – NO START DATE on the Exception Report.
- If a leaving date has been entered for the employee (using Leaving date/E082),

Payroll Active prints SPPA DUE, BUT LEAVING DATE HELD on the Exception Report.

If the employee has not worked for the company for 26 weeks up to and including the matching week, Payroll Active prints EMPLOYEE INELIGIBLE FOR SPPA – SERVICE TOO SHORT on the Exception Report.
- If the employee has not been on Payroll Active for sufficient time to enable Payroll Active to calculate average pay, Payroll Active prints AVERAGE PAY FOR SPPA NOT HELD on the Exception Report. You should enter an average pay (using M703).
- If the employee’s average pay is below the LEL for National Insurance, Payroll Active prints _{INELIGIBLE FOR SPPA – AVERAGE PAY BELOW LEL} on the Exception Report.
- If the employee is marked as a leaver (for example by using Employee status marker/E001) to set the leaver marker, or by using Leaving date/E082 to enter a leaving date), Payroll Active prints _{SPPA REM TO BE PAID FOR LVR} on the Exception Report.
- If SPPA is being calculated or a pre-determined amount of SPPA is being paid to the employee, Payroll Active prints SPPA PAYMENTS ALREADY STARTED on the Input Error Report.
- If you do not enter a date of matching certificate, or it is rejected, and you enter an SPPA start date (against SPPA start date/M020, (page SPPA-7)), Payroll Active prints _{MATCHING DATE IS NOT ON FILE} on the Input Error Report.
Payroll Active calculates the employee’s average pay over the 8 weeks from and including the matching week (providing it is a payment week), and holds the amount against Average earnings replacement/M703 (page SPPA-9).
To change the date of matching certificate, simply replace the existing date by entering the new date. To keep the same starting date for SPPA payments, you must re-enter the date (using Start Date of APP/M020 (page SPPA-7)).
To remove an existing date, enter zeroes against M010. Payroll Active removes all SPPA details for the employee, except for SPPA paid to-date (held against SPPA paid in current tax year/M738 (page SPPA-12)).
If the child is placed later than the Date of Matching Certificate/M010, enter the Actual Date of Placement/M014. Payroll Active will recalculate the number of days and act as a control mechanism to prevent payment more than 56 days after the expected date or the actual date, whichever is the later.

START DATE OF ADOPTION PAY PERIOD (APP)

M020

Use M020 to replace the existing start date of Adoption Pay Period (APP).

NOTE. The employee can decide when the SPPA payments are to start. However, payments and leave cannot start before the actual placement of the child, and they must be taken during 56 days after the placement of the child.

Format ddmmyyyy

Where dd is day, mm is the month and yyyy is the year.

Example 1

The existing starting date for SPPA is changed to 8th April, 2003:

M020 08042003

Example 2

On the April, 2003 payrun, a date of matching certificate and APP start date are entered, of 25th April, 2003 and 30th April, 2003 respectively:

M010 25042003

M020 30042003 NOTE:

If you enter a new starting date and there is no date of matching certificate, Payroll Active displays MATCHING DATE IS NOT ON FILE.
If you enter a new starting date and SPPA is being paid, either as a pre-determined amount or is being calculated, Payroll Active will print SPPA PAYMENTS ALREADY STARTED on the Input Error Report.
Enter 8 zeroes to clear the SPPA start date.

NUMBER OF WEEKS SPPA REMAINING TO BE PAID	M340
Use M340 to request SPPA to be paid to the employee. Valid input is 0-2 Format n Where n can take the value 0, 1, or 2 for weeks remaining. Example 1 The number of remaining weeks for an employee is 1 week M340 1
NUMBER OF WEEKS SPPA PAID TO DATE	M360

Use M360 to replace the number of weeks paid. Payroll Active automatically updates these values each time it calculates SPPA payments. Format n

Where n can take the value 0, 1, or 2 for weeks paid to date.

Example 1

The number of remaining weeks for an employee is 1 week

M360 1

NOTE. If you enter a value against M360 and SPPA is being paid, you must enter a value against M340 to show the number of weeks (if any) SPPA remaining to be paid. The total of the two entries must not be more than 2.

WEEKS TO BE PAID FOR PAYROLL ADJUSTMENT

M365

Use M365 to enter the number of weeks to be paid when an error has been made in a previous payrun. Format n

Where n can take a positive or negative value of 0, 1, or 2 for weeks paid.

Example 1

To correct a previous error, the number of additional weeks to be paid is 1:

M365 1

Payroll Active automatically adjusts the remaining weeks and weeks paid accordingly.

Example 2

To correct a previous error, the number of weeks for which SPPA is to be recovered is 1:

M365 -1

Payroll Active automatically adjusts the remaining weeks and weeks paid accordingly.

NOTES.

To pay SPPA weeks for payroll adjustment, you must also enter the pre-determined amount, using Positive pre-determined SPPA payment/M735 (page SPPA-11). • To recover an amount of SPPA already paid, enter a negative number of weeks to be paid against M365, and a negative amount against Positive pre-determined SPPA payment/M735.
The pre-determined amount entered against Positive pre-determined SPPA payment/M735 is automatically held as an increase for this payrun only, against SPPA increase M731 (page SPPA-11), or as a decrease for this payrun only, against SPPA decrease/M732 (page SPPA-11).
When you enter positive or negative weeks against M365, Payroll Active automatically updates the values held against: – Weeks remaining/M340 (page SPPA-8)

– Weeks paid/M360 (page SPPA-8)

The SPPA paid in the current tax year, held against SPPA total paid in current tax year/M738 (page SPPA-12) is automatically increased (or decreased) by the pre-determined amount entered against Positive pre-determined SPPA payment/M735 (page SPPA-11).
If as a result of payroll adjustment, the number of weeks paid exceeds 2, Payroll Active prints SPPA WEEKS EXCEEDS LIMIT on the Exception Report.
The SPPA adjustment will be printed on a separate payslip.
You can reverse all payments made in the previous payrun (using Previous period reversal/E072, (page EMP-23)).
You can also correct errors made in a previous payrun by using Negative pre-determined SPPA payment/M736 (page SPPA-11) to recover SPPA, but it will not be a payroll adjustment. A separate payslip is not produced and you cannot reverse the previous period’s payment.

AVERAGE EARNINGS REPLACEMENT

M703

Use M703 to replace the average earnings that Payroll Active calculates and holds against M703.

Format ppppppppppp

Where ppppppppppp is the average earnings, in pence, up to 11 numeric characters.

Example

The average earnings are set at £325.00:

NOTE. Payroll Active automatically calculates the average earnings and also the weekly SPPA earnings rate in accordance with DWP rules. For the 2003/2004 tax year, the weekly earnings rate will not exceed £100.00. The average earnings replacement is only required for values which will generate a weekly earnings rate of under £100.00. Therefore the correct entry is: M703 11111

NOTE. 90% of £111.11 is £100.00.

REPLACE WEEKLY SPPA EARNINGS RATE

M704

Use M704 to replace the calculated SPPA rate.

Format ppppppppppp

Where ppppppppppp is the calculated weekly rate, in pence, up to 11 numeric characters.

Example

If 90% of the employee’s average weekly pay (either calculated or pre-determined) is £325.00:

NOTE. 90% of £111.11 is £100.00.

NOTE:

• Use M704 when you do not wish Payroll Active to use the existing SPPA ’earnings related’ rate that has been calculated from the employee’s average earnings (held against Average earnings replacement/M703 (page SPPA-9)).

SPPA INCREASE	M731

SPPA DECREASE	M732

Use M731 orM732 to increase or decrease the SPPA payment, for this payrun only.

Format ppppppppppp

Where ppppppppppp is the amount of increase or decrease, in pence, up to 11 numeric characters.

Example 1

The employee’s calculated SPPA payment is increased by £45.00 for this payrun only:

M731 4500

Example 2

The employee’s calculated SPPA payment is decreased by £15.00 for this payrun only: M732 1500 Note:

The addition or subtraction from the calculated SPPA payment is reflected in the SPPA total paid in the current tax year (held against SPPA total paid in current tax year/M738, (page SPPA-12)).
You can enter successive amounts against each of M731 and M732 in the same pay period. At the time of the payrun, Payroll Active totals the amounts against each and increases or decreases the SPPA payment accordingly.

POSITIVE PRE-DETERMINED SPPA PAYMENT	M735

NEGATIVE PRE-DETERMINED SPPA PAYMENT	M736

Use M735 or M736 to pay or recover a pre-determined SPPA amount, for this payrun only. Use M735 when entering an SPPA payroll adjustment. Format ppppppppppp

Where ppppppppppp is the pre-determined SPPA amount, in pence, up to 11 numeric characters. For payroll adjustment, the pre-determined amount can be positive or negative.

Example 1

The employee is to receive a pre-determined amount of £112.15 for this payrun only:

M735 11215

Example 2

The employee is to have a pre-determined amount of £37.50 recovered for this payrun only:

M736 3750

Example 3

The employee is to receive a pre-determined amount of £97.75 as a payroll adjustment:

M365 1

M735 9775

In this example, the number of weeks paid is also adjusted by 1.

Example 4

The employee is to have a pre-determined amount of £155.90 recovered as a payroll adjustment:

M365 -1

M735 -15590

NOTE:

UseM735 and M736 when Payroll Active is unable to calculate average pay, or Payroll Active has not received the employee’s SPPA details in time to calculate payments.
Use M735 in conjunction with Weeks to be paid for payroll adjustment/M365 to enter pre-determined amounts of SPPA to be paid or recovered.
If you enter pre-determined SPPA payments, other than for payroll adjustments, you must enter these payments throughout the period of payment and not revert to automatic calculation.
As with calculated SPPA payments, the net amount held against M735 and M736 is added to the tax year-to-date total SPPA paid (held against SPPA total paid in current tax year/M738, (page SPPA-12)).

SPPA TOTAL PAID IN CURRENT TAX YEAR

M738

Use M738 to replace the total amount of SPPA paid in the year to-date, which Payroll Active calculates and holds against M738.

Format ppppppppppp

Where pppppppppppp is the total SPPA amount paid, in pence, up to 11 numeric characters.

Example

The employee has received a total of £945.00 in SPPA payments during the current tax year: M738 94500 NOTE:

• At the end of each tax year, Payroll Active prints the total SPPA payments made to the employee on the EOY Reconciliation, after which it sets the amount to zero.

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