To be peed off at losing £20 a week from SMP as an "admin fee"

[fantalemon]

My first AIBU.....drumroll...

I have posted briefly in Employment recently about this but it is now really bugging me and keen for some wider perspective.

So, v briefly, I have spent the last 9 months working at a local authority as a locum. I was paid through an umbrella company. For a flat fee of £24 a week they sorted out my pay from the agency and tax etc. For all intents and purposes they were my employer. Can see why they charged an admin fee as they processed my pay each week, deducted tax and NI, raised an invoice to my agency (who ultimately invoiced back the local authority). As I didn't wrk directly for them, they need to raise the money to cover their charges etc.

Fast forward 9 months, am now on maternity leave and am entitled to receive SMP from the Government as I fulfil all the criteria. I get it paid by the umbrella co each week as they are or were my employer BUT they are taking £20 a week as an "administration fee". I fail to see how it can cost them that much to process a weekly payment of exactly the same amount each week for 39 weeks. Surely it's nearer to a few pounds.....

So out of a weekly income of £135 (which is going to be a struggle anyway) I lose £20. I had not factored this into my calculations (did not realise until i got my first payslip on mat leave) and it really does make thins very difficult. I appreciate that this co has to make money but surely that's why I (and all the other "employees") pay £24 a week while they work and they should factor in that their employees may become entitled to SMP at some point. It pees me off that this is money the Government pay to women to enable them to be off work and these thieving b@stards are snaffling almost a 6th of it from me. Thankfully we are not in total total dire straits (yet) but for someone else £20 a week from £135 could mean difference of heating their home, food for the baby etc etc

I asked for a breakdown of why they say it costs them £20 a week in admin, refused other than it covers their bank charges, I asked to negotiate down the amount they deduct, refused.

Should I just suck it up and lose £20 a week or threaten to take it further (not entirely sure where to mind....)? They said to me that any payment they have to make to an employee is subject to deductions for admin, eg SSP, but surely this adversely affects women as they are ones on SMP and who lose out of money they are entitled to.

Hope this makes sense...

Giving up, I don't know to be honest, i expect my real employer was the local authority, although they were always keen to make it clear there was no relationship of emloyer and employee hence going through an agency. I was just relieved that it all looked straight forward with my SMP and the umbrella co would pay me. Any suggestions for where I can look for advice re deductions from SMP, direct gov not particularly helpful?

marriedinwhite JC do not administer SMP and so they'd know nothing about it. They do know, or should know, about other maternity benefits such as maternity allowance which is administered and processed by JC/DWP

Have you thought about asking ACAS?

Hervana....I am clearly not a very good lawyer as i should have read the contract properly in the first place! That said, does seem odd that deductions can be made from a statutory payment which is maybe why this has come to big shock to me.

Olimpia, ACAS are on my to do list for Monday, fingers crossed.

I was just after a sanity check as to whether others agreed it was off to lose part of my SMP before I plough on with this one.

Hmrc
Dwp?
I'm only pulling your chain :) sorry I'm sure you're in no m

Tis absolute bollocks and I would be doing everything I could to ensure I didn't pay the admin fee. Also think what I said up thread is wrOng. I looked into this in

If you are no longer employed, and if you met the requirements for SMP when you were pg, ie, you had 26 weeks of service 15 weeks before the date of confinement, the employer has to pay you the total amount you would have been entitled to up to and including the 39th week of maternity leave (OML and AML) on the termination date.

Ffs hate this phone

Ok I looked into it in detail a couple of years ago re SMP/salary sacrifice and I understood at the time they could not deduct the childcare vouchers from my SMP (and they didn't). Unsure about dodgy admin fees though and I'd be mighty pissed off. Would prob call ACAS like someone unthread suggested

Good luck

Could you make a freedom of information request asking how they work out how much their admin fee would be? They may be subject to the foi act of they do work on behalf of the government. It might be e enough to panic them into reducing the fee.

Def plough on with this one it's a huge amount to deduct

Thanks married. The co. is paying me the full amount if you look at my payslip but then deducts £20 which it can seemingly do under my contract. Ho hum.

Deductions cannot be made from smp. But you use an umbrella company to enable you to pay tax through pâté whilst being able to claim expenses etc as though self employed. I suspect that you are actually being paid smp and then being invoiced for this service. It is then given to you as a single lower sum. You will be able to challenge this since it's effectively being operated as a deduction from the statutory payment BUT you'll just then
Immediately be presented with a separate invoice for the admin fee. Upshot will be that you end up having to pay the admjn fee anyway.

Clearly you don't pay tax through pâté. That would be a very unusual Method and is probably not approved by HMrc

Good idea Scarlett, will look into that. They have been rude and dismissive so far, just feel like i need some ammunition to get them to reconsider.

Thanks giving up, defo can't afford any pate now :(

Again, might be worth me asking for a separate invoice. Might as well get my £20's worth of admin....

Call their head office?
Name and shame?
Do they have a regulatory body?

Apparently one of the directors has looked at this but will not agree to reduce the fee. I get they are a commercial entity, out to make money but jst dont feel its fair to treat women on smp in this way. Don't seem to be covered by a regulatory body which is probably why they can do this.

Do they definitely have to sort out the payments? Can you not bypass them, can the agency not just pay you? Have you spoken to the agency or asked them whether they could pay you direct?

Think they do have to pay me as they are my employer for tax, NI purposes. The joys of agency working! Thanks anyway.

Sorry no advice but almost the same thing happened to me! I was working for an agency who offered a 'travel allowance' which was basically a small amount of your wage which wasn't taxed. At the time of working it meant £4 extra a week, when I went on maternity leave I lost £20 a week. Really wish I'd left and claimed government smp instead. It doesn't sound a lot but over 39 weeks and on a tight budget anyway it made a huge difference to me. I tried to fight it (there's a number for smp you can call for advice, have you tried that?) without much success - hope you do better than me!

That's really interesting cup of tea although sorry to hear you lost out too. I will google the helpline no (thanks for tip) although I think I have to accept they can do this. Not ready just yet to give up the fight!

I'm not any sort of lawyer at all so am fully prepared to be told I'm wrong, but surely they're either your employer, in which case they pay you a wage (or SMP) and can't make deductions from your SMP, or they're an umbrella company you pay (as deductions from your normal wage to save them invoicing you separately) to sort out your tax admin etc? Surely they can't be both?

Did you get anywhere fanta?

This is the Employer's Rule Book for SMP.

"SMP should be paid in the same way as you would pay
earnings and for the same period. All the usual
deductions apply, including PAYE tax and National
Insurance contributions (NICs), except Attachment of
Earnings Orders or Deductions of Earnings Orders for the
Child Maintenance and Enforcement Commission
(Arrestment of Earnings Orders in Scotland)."

Assuming their annual liability for Class 1 NICs is more than £45,000 they only get back 92% of the SMP they pay. (They get 103% if less than £45k, the 3% is supposed to cover the admin cost for small companies)

You are using this company to provide you with a payroll service. A service for which you pay a fee, no matter what the type of payment is.

I know that they cannot make deductions for childcare vouchers as I had an issue with this a couple of years ago. I thought any deductions from SMP were unlawful (although don't know about separate invoicing for a service). I received excellent advice from the Working Families helpline (0800 013 0313) who I found more aware of the specifics than ACAS etc. Was advised to contact them by Citizens Advice.