Is my maternity leave pensionable?
Maternity leave is pensionable. Where an employee intends to return to work the amount of contractual maternity pay payable can be found here and, typically, would be as follows:
- (i) for the first eight weeks of absence, the employee will receive full pay, less any Statutory Maternity Pay or Maternity Allowance (including any dependants’ allowances) receivable;
- (ii) for the next 18 weeks, the employee will receive half of full pay plus any Statutory Maternity Pay or Maternity Allowance (including any dependants’ allowances) receivable, providing the total receivable does not exceed full pay.
- (iii) for the next 13 weeks, the employee will receive any Statutory Maternity Pay or Maternity Allowance that they are entitled to under the statutory scheme.
By prior agreement with the employer occupational maternity pay may be paid in a different way, for example a combination of full pay and half pay or a fixed amount spread equally over the maternity leave period.
As indicated above, it would be possible, with your employer’s agreement, to have your Maternity Pay averaged over the duration of your Maternity Leave (maximum of 12 months). In these circumstances, you would receive the same amount of Maternity Pay each month rather than in accordance with the schedule outlined previously – but the overall amount of pay received equates to the same value under either method of payment. As the rate of Maternity Pay payable is based upon an average of pay received in the months prior to Maternity Leave commencing, this does not impact on the contribution rate operated whilst on Maternity Leave and, as such, would be expected to remain the same throughout the Maternity Leave period.
The determination of scheme contributions, whilst on Maternity Leave is, perhaps, best illustrated with a comparison example showing pay as per the standard schedule versus one where average regular monthly pay has been requested and is given below.
| Month | Standard Maternity Pay (£) | Member contribution (£) | Employer Maternity Pay (inc. Deeming) (£) | Employer contribution (£) | Averaged Maternity Pay (£) | Member contribution (£) | Contribution 'arrears' (£) |
|---|---|---|---|---|---|---|---|
| 1 | 5,886.00 | 735.75 | 5,886.00 | 846.41 | 2,253.66 | 735.75 | 0.00 |
| 2 | 5,886.00 | 735.75 | 5,886.00 | 846.41 | 2,253.66 | 735.75 | 0.00 |
| 3 | 3,443.00 | 430.38 | 5,886.00 | 846.41 | 2,253.66 | 430.38 | 0.00 |
| 4 | 3,443.00 | 430.38 | 5,886.00 | 846.41 | 2,253.66 | 430.38 | 0.00 |
| 5 | 3,443.00 | 430.38 | 5,886.00 | 846.41 | 2,253.66 | 430.38 | 0.00 |
| 6 | 3,443.00 | 430.38 | 5,886.00 | 846.41 | 2,253.66 | 430.38 | 0.00 |
| 7 | 500.00 | 62.50 | 5,886.00 | 846.41 | 2,253.66 | 62.50 | 0.00 |
| 8 | 500.00 | 62.50 | 5,886.00 | 846.41 | 2,253.66 | 62.50 | 0.00 |
| 9 | 500.00 | 62.50 | 5,886.00 | 846.41 | 2,253.66 | 62.50 | 0.00 |
| 10 | 0.00 | 0.00 | 5,886.00 | 846.41 | 2,253.66 | 0.00 | 62.50 |
| 11 | 0.00 | 0.00 | 5,886.00 | 846.41 | 2,253.66 | 0.00 | 62.50 |
| 12 | 0.00 | 0.00 | 5,886.00 | 846.41 | 2,253.66 | 0.00 | 62.50 |
| Totals (£) | 27,044.00 | 3,380.52 | 70,632.00 | 10,156.92 | 27,044.00 (rounded) | 3,380.52 | 187.50 |
For the purposes of this illustration the following assumptions have been made:
- Employment prior to Maternity is whole time.
- Pensionable salary is £70,631.00 (equating to a monthly figure of £5,886.00)
- Statutory Maternity Pay equates to £500.00 per month
- The Maternity Leave period is 12 months and that the member returns to employment after Maternity Leave
- Member contribution rate is 12.5%
The overall amount of Maternity Pay received is the same under either option and, importantly, so are the member contributions deducted from pay received. This is because, under NHS Pension Scheme regulations, contributions are calculated by reference to the ‘standard’ Maternity Pay schedule. It should also be noted that for month 10-12 a contribution is not deducted from pay, even where Maternity Pay has been averaged. Instead, these contributions (indicated as ‘arrears’ in the illustration above and based on the pay received immediately before going in to the ‘no pay’ period) would be collected from pay upon returning to paid employment and, typically, over a 3 month period (to reflect the period over which the ‘arrears’ arose). It may have been expected that contributions deducted, where pay has been averaged, to equate to £281.71 (£2,253.66 x 12.5%), but it can be seen that this is not the case under Scheme regulations.
Your maternity, paternity or adoption leave is pensionable, as long as pension contributions are paid to cover the leave period. If you are entitled to maternity, paternity or adoption pay, your employer will continue to deduct contributions on the pay you receive.
If you go onto nil pay, the contributions will be based on the amount of pay received immediately prior to the start of the unpaid period.
When you return to work following leave, your employer should arrange for any contribution arrears to be collected.
If you repay contributions, this period will be treated as continuous pensionable employment. Your service will be credited as if you did not have an unpaid period. The pensionable pay recorded in the 2015 scheme will be deemed and reflect the unreduced pay you would have received had you not been on reduced statutory levels of pay during the pensionable break.
Your maternity, paternity or adoption leave is pensionable. As long as you continue to receive your share of the partnership profits, then normal pension contributions will be deducted on the amount of pay you received during the leave.
You can elect to pay contributions in respect of any unpaid maternity, paternity and adoption leave periods. The contributions during the nil pay period will be based on the amount of pay received immediately prior to the start of the unpaid period.
If you repay contributions, this period will be treated as continuous pensionable employment. Your pension record will be credited with your full share of partnership profit as if you did not have unpaid period.
Your maternity, paternity or adoption leave is pensionable, as long as you continue to receive pensionable NHS earnings (including statutory maternity pay).
During a period of paid maternity, paternity or adoption leave, your pension record will continue to record the ‘deemed’ unreduced earnings you were receiving immediately prior to your leave.
You can elect to pay contributions in respect of any unpaid period in a similar way to secondary care doctors.
If you repay contributions, this period will be treated as continuous pensionable employment. Your pension record will be credited with unreduced contractual earnings (deemed pay) as if you did not have unpaid period.
The Type 2 end of year form must be completed to detail the pensionable break taken and a maternity break form may be required, if relevant, to be completed by the practice.
GP locums/bank staff are not able to continue to pay pension contributions during a period of maternity, paternity or adoption leave. You are only able to contribute to the scheme while actually working.
If you are a doctor in training read how rotations can impact on maternity, paternity and adoption leave.
Not returning to work from maternity leave
Your pension contributions will continue to be deducted from the pay you actually receive. Your last day of scheme membership will be the last day you paid pension contributions.
If you change your mind and decide not to return to work, the last day of pensionable membership will be the date on which contributions ceased.
You can’t have a refund if you made contributions during your leave. A refund is only possible if you have been contributing to the scheme for less than two years in total. Where a refund is possible you should consider whether you want to access this or whether, if you plan to resume pensionable service within 5 years of leaving the scheme, it is in your interests to leave those benefits accrued to revalue in line with inflation plus 1.5%. Active revaluation including the additional 1.5% ceases after a break of 5 years or more.
Any refund of contributions taken is subject to income tax deductions.
If you are a secondary care doctor and your pension becomes payable during a period of reduced pay or unpaid leave pensionable leave, pensionable pay will be calculated as though no reduction in pay had occurred.
If you are a GP and your pension becomes payable during a period of reduced pay or unpaid leave pensionable leave, your credited ‘deemed’ income will reflect the correct position depending on whether you are a GP partner or a salaried GP.
Paying your contributions
You will continue to pay the same percentage contribution as applied immediately before your period of maternity, paternity or adoption leave began. This is because you will be deemed to have unreduced earnings for the purposes of your pension records.
- When in receipt of full pay: contributions are payable on full pay.
- When in receipt of half pay: contributions are payable on the half pay.
- When in receipt of statutory maternity pay: contributions are payable on the amount actually received.
- When on unpaid leave: contributions are based on the rate of pay immediately before the period of unpaid leave began.
It is not compulsory to make pension contributions during unpaid leave. If you would prefer not to then you must notify your employer prior to your pay reducing to nil.
Do I have to contribute whilst on Maternity Leave
Whilst contributions would ordinarily be deducted from Maternity Pay received, you are able to cease contributing to the NHS Pension Scheme at any time by opting out. If you decide to opt out then the Maternity Leave period is not considered as pensionable and contributions are not deducted from pay received.
If you opt out of contributing prior to, or during, your Maternity Leave you cannot subsequently elect to rejoin and pay contributions during your Maternity Leave or retrospectively. You would, however, be able to resume membership upon return to paid employment.
Whilst maternity allowance itself is not pensionable you are able to contribute to the scheme in the same way as if it were a period of unpaid leave.
In these circumstances the rate of contribution is based on your pay immediately prior to commencing any maternity leave period.
If, for some reason, your employer has failed to collect contributions during your leave, these can be repaid but it must be done within a reasonable timescale.
Your employer should be informed as soon as possible after return to work to make the necessary arrangements to collect contributions from your pay.
During unpaid leave pension contributions cannot be deducted (as no pay is being received). Instead, contributions due, for the unpaid period, accrue as ‘arrears’ and will be deducted from pay upon returning to paid employment. Typically, arrears would be collected over the same timeframe as the unpaid leave and are calculated by reference to the rate of pay immediately before the unpaid leave period. Usually this would be SMP, meaning arrears would be based on SMP only.
The employer contribution is based on full pay throughout your leave. This is the case even if your pay reduces or stops during the leave period.
Yes. Contributions are payable for the KIT days based on the level of pay which was payable prior to the KIT day (e.g. reduced earnings).
Any part day worked is taken as a full day for pension purposes.
If you are buying added years or additional pension you will continue to pay contributions based on your unreduced pensionable pay immediately before the period of maternity, paternity or adoption leave commenced. This also applies to Added Years/Additional Pension arrears arising from unpaid leave, meaning that contributions remain deductible at the rate of pay in place immediately before the Maternity Leave period commenced.
Shared parental leave
Shared parental leave continues to be pensionable, with tiered contributions based on the unreduced rate of pay, unless you opt out of pensioning the break.
Impact on annual allowance calculations
Errors in recording service and pay during periods of maternity leave can result in inflated pension growth figures which would appear to give rise to annual allowance charges. As pay is ‘deemed’ to be unreduced during periods of pensioned leave fluctuations in pension growth should be minimal on a return to full paid employment.