Repaying SMP

[countrybunny]

Hoping someone has experience of this as I can't seem to find the answer!

On maternity leave and lost my job. Due to receive the rest of my SMP in a lumpsum which will cover me until January time.

Obviously you can't work whilst receiving SMP but I need to start looking for a new job. If I were to be lucky and find a new job before January, who would I repay the SMP back to and how would I do this?

Thank you!

Bump

I think you will probably keep getting your SMP monthly but it might be paid by HMRC rather than your employer depending on why you no longer have a job.

The point is in the name though.. it's statutory maternity pay. If you are entitled to it you are entitled to it even if you quit your job the day you go on maternity leave. It's calculated on weeks 17-25 of your pregnancy.

You don't have to pay any of it back.

If you received occupational maternity pay on top of your SMP that might be different.

That isn't correct. The employer once liable will continue to be liable for the payment of SMP. OP did you sign a settlement agreement and thus receive as a lump sum?

The OP is correct! As she is being paid the lump SMP in advance, should she begin work for another employer during the period which the SMP would have been paid if not as a lump sum then she is no longer entitled to SMP and as such would technically be liable to pay it back.
OP, sorry but I’m not sure how that would work in practice. Is the company you’re leaving still trading? If so I assume you repay it to them.l as it is they who are paying it and reclaiming from HMRC. Maybe HMRC could confirm or offer advice?

No - that is incorrect. This is not a situation where the OP will continue to receive regular payments which would then mean that her entitlement would cease if she started another job. The OP has specifically said that she will receive a lump sum. That is why I asked whether this is to be tied up in a settlement agreement since that will determine what happens in the event that she gets another job after having received a lump sum.

Sorry I completely misread definitely shouldn't mumsnet before coffee.

@user187656748 entitlement ceases when a new job is started during a maternity period regardless of how or when the SMP is paid.
Here is some useful info, particularly the second from bottom paragraph.

www.steenandco.co.uk/statutory-maternity-pay-_112/

I would suggest you cross that bridge if you come to it. Focus on job hunting and find the right job for you. When that happens then consider asking to have your start date deferred till January so you can take your 9 months of paid maternity leave. If that won't work for them, then write to HMRC after your first payday but before 5th April asking them to advise how to reconcile the numbers.

By the way you haven't mentioned how/why you lost your job but do you suspect that your maternity status contributed to the reason? If a whole team is being made redundant regardless then obviously it would have happened anyway. Otherwise it could well be a discrimination case.

Myname you are reading that incorrectly. It specifically says that the employer might not be able to reclaim the SMP from HMRC.

I mainly advise employers rather than employees (employment solicitor) and we caution against paying SMP as a lump sum since whilst the employer might still be able to evidence that they have paid the employee their entitlement, there could be issues in them reclaiming it from HMRC and the chances of them being able to recover from the employee themselves are low (and in all likelihood not cost effective to even try). The issue is, as the article says, that the employer would have wrongly paid the SMP to the employee and so the employer wouldn't be able to recover the SMP from HMRC. The employer is likely to be the one out of pocket, not the employee.

OP my advice to you would be to assume that your employer might try to come after you to recover the sum it had incorrectly paid. I doubt it but it's possible, particularly if they specify in a settlement agreement that the sum or part of it is repayable if you get another job within the maternity period that they paid you for. Therefore it wouldn't do you any harm to put that money to one side for a few months just in case.

user maybe you only skim read it but it also specifically says
‘One further point to note is that SMP is only payable to a woman who has ceased work. If an employer pays the SMP in a lump sum at the outset when the employee leaves there is a possibility that the woman might start a new job. If she does so during the maternity pay period she will not be entitled to SMP.’

And

‘We have previously raised this with HMRC would told us that it would cooperate with the Company in recovering the SMP from the employee.’

The OP didn’t ask if it would be cost effective for the employer to try to reclaim the money, she asked if and how she would repay it.

So OP it seems the short answer could be that yes you would be due to repay the SMP if you are no longer entitled to it but it’s unlikely your previous employer would know if you got a new job. HMRC would obviously know you’re in employment but aren’t exactly known for joined up processes.

So back to my original advice, maybe speak to HMRC.

And good luck with the job hunt. I’ve been in that position and it’s not fun. Hope you find the perfect job at the perfect time for you!

I did skim read it because I've never heard of that firm but I have read plc on it and read the legislation.

The employee will not be entitled to the SMP - on this there is no disagreement.

The employee cannot contract out of their right to receive SMP - in a settlement agreement or otherwise.

but the employer will have paid a sum to the employee as a lump sum to compensate them for the fact that they are not going to continue smp payments. HMRC will usually accept this as a position from the employer as long as the settlement agreement is drafted correctly and separates out the payments very clearly. They will therefore allow the employer to make the reclaim because the SMP was due anyway.

However, if the employee gets another job and the employer has paid a lump sum to the employee to compensate them for the lack of SMP payments then the SMP will never have been due for the period when the employee is working. As such the employer will have paid the money to compensate the employee but will not be able to make the reclaim. The employer is out of pocket. The employee is only likely to be out of pocket if the employer tries to recover the incorrect payment from the employee which is unlikely unless there was a specific clause allowing them to do so in the settlement agreement. Employers are told of this risk when the settlement agreement is drafted.

I'm using the phrase "compensate" here to make it clearer for the OP - not to indicate that its a tax free payment. The employer only stands a chance of a reclaim if they've taxed and NId the payment correctly.

so I was correct in my responses and not reading things incorrectly - thanks for clearing that up!

No - you were not correct

The employer would be the one out of pocket.

Wow thank you for the responses - it is been paid as an early conciliation settlement arranged by ACAS.

The wording is 'a lump sum payment of £X in satirisation of the remaining entitlement to SMP'. Does this sound like it is SMP or it's an amount to cover that within a settlement? Thanks so much for your help.

Has it been taxed and NId OP?