Salary sacrifice pension contributions and maternity leave

Hi, Everything I have found online/been told anecdotally/been advised by payroll providers suggests that if an employee contributes to their pension through salary sacrifice (thus meaning that the full contribution becomes the employer's contribution), and goes on maternity leave, then the employer has to carry on making the full contribution - either for the full leave period, or at least for the period where the employee is in receipt of Statutory Maternity Pay. However, I can't find any statutory information or legislation to confirm this position. Is it the case that it comes down purely to the individual employer's scheme rules, and all employers err on the side of caution by continuing to pay the total salary sacrifice contribution while an employee is on maternity leave? Is anyone aware of any ET cases where this has been tested? Thanks

Hi,
You would need to check the contractual agreement to see if you are still required to make the payments.
But you are correct that you cannot deduct a salary sacrfice from the SMP.
Thank you.

If you are operating a salary sacrifice scheme, you have legally changed the employee contract and reduced the salary in exchange for a benefit in kind at the cost of the employer. This must be maintained whilst an employee is on statutory leave so not to cause a breach of contract, discrimination, constructive dismissal etc and there are multiple tribunal cases that involve maternity. The employer manuals offer a lot on this, 2 of which are: https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim42766 https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim42753

Where an employer tops up SMP, can this be used to fully cover the salary sacrifice pension contribution? Our payroll provider is suggesting otherwise. I'm struggling to understand why the employer needs to top pension contribution when the sacrificed amount could be covered by the employee through the OMP top up, otherwise it feels like we are topping up twice?

Hi,
 

Statutory maternity pay (SMP) must be paid in full and salary sacrifice cannot be taken from the statutory element. If the employer is paying above the statutory amount then any amount above the SMP can be used towards the salary sacrifice. Thank you .