Increases to Statutory payments and Compensation limits 2011

Increases to Statutory payments and Compensation limits 2011

Statutory payment amounts

The Government has announced new statutory payments rates for Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP) and Statutory Adoption Pay (SAP) for tax year 2011/12.  They are as follows:

  • The standard weekly rate of SMP and the weekly rates of SPP, SAP and Maternity Allowance will rise from £124.88 to £128.73 – it is not yet clear whether this will be for payment weeks starting on or after Sunday, 3 April 2011 or on or after Sunday, 10 April 2011.
  • The weekly rate of SSP will rise from £79.15 to £81.60 from 6 April 2011.
  • The lower earnings limit for qualifying for SSP, SMP, SPP and SAP will rise from £97.00 to £102.00 per week from 6 April 2011.

Compensation limits

The Employment Rights (Increase of Limits) Order 2010 has been published and will come into force from 1 February 2011.  The Order increases the limits applying to certain awards of employment tribunals and to other amounts payable under employment legislation.  The main changes are:

  • Maximum amount of a ‘week’s pay’ for the purpose of calculating a redundancy payment or the basic or additional award of compensation for unfair dismissal or payments to employees in the event of insolvency – increases from £380 to £400.
  • Limit on the amount of compensatory award for unfair dismissal – increases from £65,300 to £68,400.
  • Limit on the daily amount of statutory guarantee payment – increases from £21.20 to £22.20.

The increases apply where the event giving rise to the entitlement to compensation or other payment occurs on or after 1 February 2011.  The date is determined differently depending on the type of claim brought.  In unfair dismissal claims, this date is the effective date of termination of employment.  In guarantee payment claims, it is the day in respect of which the payment is due.

The statutory payments increases reflect an increase of 4.6% in the retail prices index from September 2009 to September 2010.

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