§ Richard BurdenTo ask the Secretary of State for Work and Pensions how much small employers will be able to recover for the statutory maternity pay they pay out from 6 April 2002. [24995]
§ Malcolm WicksCurrently small employers whose gross national insurance payments in a tax year are £20,000 or less (the small employers relief threshold) can recover 100 per cent, of the Statutory Maternity Pay they pay out plus an additional amount, currently 5 per cent., in compensation for the employers share of national insurance contributions due on SMP payments. The compensation rate is reviewed each year based on a formula which compares the employers' share of national insurance paid on SMP with the total amount of SMP paid by all employers.
From 6 April 2002 the threshold is being doubled to £40,000. This will mean that an additional 10,000 employers a year will qualify and in all around 60 per cent, of all employers paying SMP in a year will get full reimbursement. At the same time the additional compensation rate is being amended to 4.5 per cent, in line with the estimates made of SMP due to be paid and employers' national insurance costs on those payments from April 2002. Regulations will shortly be laid to achieve these changes.