The Institute of Payroll Professionals (IPP), a 5,000 membership led organisation, believes that there may be a number of employers that have overlooked the official guidance that is currently available from both the IPP and government departments, despite the regulations which came into effect on the 1st of October.
The confusion arises when certain age limits are removed. For example, the lower age limit of 16 for entitlement to Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP), Statutory Adoption Pay (SAP) and Statutory Sick Pay (SSP) has been removed, as has the upper age limit of 65 for entitlement to SSP.
As this is the most far reaching discrimination legislation ever to reach the statute books no payroll professional can afford to be ignorant of the full scope of the new law. The role of the IPP is to ensure its members are aware of legislative changes and how they impact on the payroll function.
What will change as a result of the legislation is that provided the younger or older employees meet all the normal qualifying conditions they will be entitled to the Statutory Payments.
Karen Thomson IPP Head of Policy and Research said: ìMore often than not when rulings are made in the EU the effect on the UK is more problematic than our European counterparts.
ìDue to the fact that our National Insurance system uses age as an identifier a number of regulations have since had to be changed.
ìWhat is confusing is that not all of them have been changed. For example; a man over the age of 65 on 1st October will not be required to pay any National Insurance contributions on earnings, however he will now be entitled to receive Statutory Sick Pay (SSP).
ìAn under 16 year old, who is also not eligible to pay National Insurance contributions on earnings, can receive SSP but ironically can also receive Statutory Maternity Pay, and yet it is unlawful to have sex under 16!
ìThe impact on retirement schemes has also caused employers concern, as where they might have had age restrictions particularly those that had a retirement date before 65 years these employers have had to look at their schemes and ensure that no discrimination is taking place.î
All employers who offer any protection benefits for their staff will have to make sure the schemes are written to 65 or they could end up denying benefits to older workers.
Some payroll software products do not hold, or consider, multiple exclusion reasons from SSP.
As soon as the product detects that an employee is over 65 for example, entitlement is denied.
Further information and support on these latest changes and others is available on the IPP website; www.payrollprofession.org
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