Statutory Adoption Pay (SAP) - glossary

Terms explained for SAP

Adopter

In relation to a child, means a person by whom a child has been or is to be adopted.

Adopting a child from abroad

This is when an individual or couple who live in the United Kingdom (UK) adopts a child from another country and the child enters Great Britain or Northern Ireland to live with the adoptive parents. The adoption does not involve the placement of the child for adoption under the law of any part of the UK.

Adoption leave date

This is the date when the leave starts depending on when the child is placed or enters the UK to live with the adoptive parents. Statutory adoption leave can start on any day of the week, depending on when:

  • The employee wants to start their leave
  • A child is placed with the adopter for adoption under UK law
  • A child enters the UK to live with the adoptive parent when adopted from abroad.

Average Weekly Earnings (AWE)

To get SAP the employee must have average weekly earnings of at least the Lower Earnings Limit (LEL) which applies on the Saturday of the week in which they were matched with a child or, for adoptions from abroad, the week in which they were given the Official Notification. Details of how to work out AWE can be found in the Employer Helpbook E16.

Class 1B earnings

Any expense payments or benefits in kind that are included in a PAYE (Pay As You Earn)Settlement Agreement but that would ordinarily have attracted Class 1 National Insurance contributions (NICs) liability. Any earnings included in a PAYE Settlement Agreement are liable for Class 1B NICs.

Delaying payment because of late notice

You can withhold payment of SAP for the period of the delay if the notification of the start of the SAP is given outside the time limits and you do not accept there was a good reason for the delay.

Earnings

AWE should include all earnings paid in the set period that attract a Class 1 NIC liability, or would but for the level of earnings or the employee’s age, including Statutory Adoption Pay (SAP), Statutory Paternity Pay (SPP), Statutory Maternity Pay (SMP) and Statutory Sick Pay (SSP). If your employee’s earnings are lower than the LEL, you may need to add in enough of any earnings subject to Class 1B NICs within the set period to give an AWE of at least the LEL.

Entry date

The date the child enters UK to live with the adoptive parents. When adopting a child from abroad, your employee must give you evidence of the date the child entered the UK within 28 days of entry. This could be a plane ticket or copies of entry clearance documents.

Entry week

This is the week beginning on a Sunday that includes the entry date

Evidence of matching

Certificate signed by the adoption agency as proof that the employee has been matched with a child for adoption under UK law.

This is needed to work out the employee’s entitlement to SAP and provides the ‘matching date’ when a child is being placed under UK law.

Gross earnings

The amount the employee is due to receive before any deductions are made.

Late notification

Where it is not reasonably practicable for your employee to give you the statutory notice, they must do so as soon as it is. You must decide if there was a good reason for any delay in your employee notifying you.

You should be flexible about notice because there is often very little time between the dates that, either the adopter is matched with the child and the date the child is placed.

If your employee doesn’t notify you within 28 days before they want to start to be paid SAP, but you feel there was a good reason for delay, you must accept that the notification is in time.

If the employee doesn’t give you 28 days notice and there isn’t good reason for delay, it may be possible for them to choose a later date so long as the SAP can start by the day the child was placed or within 28 days of the date of entry.

Legal custody

Legal custody means detained, arrested or in prison. It doesn’t include voluntarily helping the police with enquiries, serving a suspended sentence or being on bail. If your employee is taken into legal custody you should send them form SAP1.

Length of employment

For adoption in the UK your employee must have been continuously employed by you for at least 26 weeks before the matching week. For adoption from abroad, the employee must have been continuously employed by the same employer for at least 26 weeks before the Official Notification Week, or if they have changed employers since then, they must have been employed by you for at least 26 weeks by the time they want to start their SAP. Details can be found in the Employer Helpbook E16.

Lower Earnings Limit (LEL)

This is the minimum level of earnings that an employee needs to qualify for SAP.

For SAP it is the LEL which applies on the Saturday of the Matching Week (MW) or ONW that must be used. Details can be found in the Employer Helpbooks E16.

Matching date

The date on which the adopter was told that they have been told by the adoption agency that they have been matched with a child for adoption.

MW

The week commencing the Sunday on or immediately prior to the matching date and ending on the following Saturday.

NICs

For SAP purposes these are the Class 1 NICs paid by employers and their employees. Both the employer and the employee must be liable to pay Class 1 NICs or would be but for the level of earnings or employee’s age.

For SAP recovery or funding purposes, they are total gross employer’s secondary and employees’ primary Class 1 NICs liability in all the employer’s PAYE schemes.

Notification periods

Time limits for notifying the employer of their intended dates for pay and leave.

Official notification – adoption from abroad

Written notification, issued by or on behalf of the relevant domestic authority, to an adopter that they have issued or are about to issue a Certificate of Eligibility to the authorities abroad, that the adopter has been assessed as suitable to adopt a child from abroad.

ONW

The week in which the employee received Official Notification that the Certificate of Eligibility has been or will be issued in relation to the adoption of a child from outside the UK.

Placement date

The date the child starts living with the adopter permanently with a view to being formally adopted in the future.

Qualifying tax year

The qualifying tax year for deciding the LEL appropriate to an employee’s AWE for SAP entitlement is the tax year which falls on the Saturday of the employee’s MW for domestic adoptions or ONW for adoptions from abroad.

The Qualifying tax year for deciding whether or not an employer is a Small Employer for recovery or advance funding of SAP is the tax year immediately before the tax year in which the MW or ONW Sunday falls.

SAP 1 (form)

Details the reasons why the you cannot pay the employee SAP and can be used by an employee as evidence of their non-entitlement when applying to the relevant UK adoption authority or the Department for Work and Pensions (DWP) for financial assistance during their absence from work for adoption purposes.

SAP 2 (form)

SAP record sheet which you can use to maintain a record of payments made.

SC 6 (form)

Form you should use to tell your employee the terms and conditions relating to entitlement to SAP when they are adopting the child from abroad jointly with their partner. It includes a declaration for the employee to sign that they are not also claiming SPP. The employee should give it to you as part of the evidence required for SAP.

Set period

The 'set period', or 'relevant period', is needed to establish the earnings to be used and the number of days, weeks or months to divide those earnings by. All earnings paid in the'set period' are divided by the number of days, weeks or months in that 'set period'.

Regulations define the set period, as the period between:

  • Date 1 the last normal payday on, or before the Saturday of the matching week or official notification week, This payday will be Date 1 in the 'set period', and
  • Date 2 the last normal payday falling not less than eight weeks before the payday at Date 1. Date 2 will be the day after this payday and is the start of the 'set period'.

You should include all the earnings paid on, or after Date 2, up to and including those paid on Date 1.

The 'set period' ends with the last normal payday on, or before the end of the MW or ONW and starts with the last normal payday at least eight weeks before that.

Small employers compensation rate

An amount of compensation paid to a small employer if their total annual Class 1 NICs they have to pay to HMRC is £45,000 or less in the 2006-07 or 2007-08 tax year. The compensation rate for both tax years is 4.5 per cent of the total SAP paid to the employee in each tax month.

Small employers relief

The SER scheme enables small employers whose total gross Class 1 NICs from all their PAYE schemes, including primary (employee) and secondary (employer) liability, is at or below a set annual threshold (£45,000 or less in the 2006-07 or 2007-08 tax year) to recover 100 per cent of the SAP paid plus an additional compensation payment.

Standard rate

The standard rate to pay for SAP pay weeks starting on, or after 6 April 2008 is £117.18. The amount you actually pay to the employee for the full SAP pay period is the lesser of the standard rate and the earnings related rate which is 90 per cent of the employee’s average weekly earnings.

Statutory Adoption Pay (SAP)

SAP is intended to help employees take time off work to be with their new family by providing a measure of earnings replacement. It was introduced for qualifying employees who are adopting a child who:

  • was placed with the adopter under UK law
  • entered UK from abroad to live with the adopter.

Tax month

Tax months start on the sixth of each month and finish on the fifth of each following month. The first tax month each year is 6 April to 5 May and is known as the April tax month.

United Kingdom (UK)

Includes England, Scotland, Wales and Northern Ireland and the various islands except it does not include the Channel Islands or the Isle of Man.

UK law

For your employee to get SAP for an adoption in UK the child must be placed with them under the UK domestic law covering adoption in the UK.

Week

For working out SAP entitlement and payment, a week is a period of seven days.

Working outside UK

Employees who work outside the UK during the MW may be entitled to SAP if the employer is still liable to pay employer’s Class 1 NICs whilst the employee is working abroad, or would be but for the employee’s age and level of earnings.