What do we already know?
Most years in April the annual increase in statutory pay rates come into effect.
The rates normally increase each April in line with the consumer price index (CPI). However a 0.1% fall in the CPI in the year to September 2015 meant that there was no increase to the rates in April 2016 (see our December 2015 Newsflash No increase to statutory rates). This means that the rates have been frozen since 5 April 2015.
There has been an increase in the consumer price index (CPI) of 1% in the year to September 2016, and therefore the Government (the DWP) has announced the following proposed increases to statutory benefit payments which will be effective in April 2017:
The weekly rate of:
- Statutory Sick Pay (SSP) will rise from £88.45 to £89.35;
- Statutory Maternity Pay (SMP) and (maternity allowance) will rise from £139.58 to £140.98; and
- Statutory Paternity Pay (SPP), Statutory Shared Parental Pay (ShPP) and Statutory Adoption Pay (SAP) will rise from £139.58 to £140.98.
To be entitled to these statutory payments, the employee’s average earnings must be equal to or more than the lower earnings limit. The lower earnings limit is increasing from £112 to £113 in April 2017.