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Explanatory Memorandum to Employment (Northern Ireland) Order 2002

Article 6: Statutory adoption pay

Article 6 establishes a new statutory right to SAP for adoptive parents around the placement of a child for adoption.  SAP will be available to an adoptive parent of a child newly placed for adoption - it will not apply to step-family adoptions or adoption by a child’s existing foster carers - whether the child is being adopted within the UK or from abroad.  For practical reasons, there are slight differences to some elements of the provisions for domestic and adoptions abroad.  Regulations will set out how SAP will apply to adoptions abroad.

Article 6 states that SAP will be available for a period of up to 26 weeks.  The rate of SAP will be set in regulations.  In 2003 it will be the lesser of £100 per week or 90% of the employee’s average weekly earnings.

SAP will be available to an employee who has met the service qualification (continuous service with the same employer for at least 26 weeks by the week in which an approved match with the child is made), has an approved match with a child, has given appropriate notification, and whose average weekly earnings are equal to or above the lower earnings limit applying to NICs (LEL is currently £75 a week).

SAP will be administered by employers in the same way as SMP.  Employers will be able to recover a percentage of the amount of SAP they pay out, (limited in most cases to 92%), with small employers who are entitled to Small Employers’ Relief (in 2002/3, those with NICs due in a year of £40,000 or less) able to claim 100% and an added payment (in 2002/3 of 4.5% for SMP) to compensate for employers’ share of NICs payable in respect of SAP.  Article 8 provides for a power to make regulations to enable employers to ask for funding, if necessary in advance, from the Inland Revenue where the amount of SAP they have to pay their employees exceeds the tax and NICs that they are due to pay to the Inland Revenue.  In certain circumstances, where an employer fails to pay SAP, the Inland Revenue will become responsible for the payment.  Liability will also fall on the Inland Revenue from the first week in which an employer becomes insolvent.

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