At the present juncture, most of the April 2022 rate changes have now been published. The one notable exception that is missing in terms of what is known about the April 2022 rate changes is what the new statutory cap on a weeks pay will be for the purposes of calculating the basic award and statutory redundancy pay.
April 2022 Rate Changes
The April 2022 rate changes are now just a couple of months away. Those that have been published thus far include the new National Living Wage and the National Minimum Wage rates, the new rates for family friendly payments, and the new rate for Statutory Sick Pay (SSP). Those rate changes will take effect between the 1st – 6th April 2022, and this article focuses upon those changes.
1st April 2022
The first of the April 2022 rate changes that will come into force are the National Minimum Wage and the National Living Wage rate increases that will apply from the 1st April 2022. The new rates for those are as follows:-
- For workers aged 23 and over (i.e. the National Living Wage), the rate will increase by 6.6% from £8.91 per hour to £9.50 per hour
- For workers aged 21-22 inclusive, the rate will increase by 9.8% from £8.36 per hour to £9.18 per hour
- For workers aged 18-20 inclusive, the rate will increase by 4.1% from £6.56 per hour to £6.83 per hour
- For workers aged 16-17 inclusive, the rate will increase by 4.1% from £4.62 per hour to £4.81 per hour
- The apprentice rate will increase by 11.9% from £4.30 per hour to £4.81 per hour
- The daily rate for the accommodation offset will increase by 4.1% from £8.36 to £8.70
In setting the new rate for the National Living Wage, the Government implemented the recommendations from the Low Pay Commission in full.
The Chair of the Low Pay Commission, Bryan Sanderson, stated: “The economic situation has improved substantially since last year, with GDP approaching its precrisis level earlier than predicted and relatively strong growth expected next year. The labour market has also recovered strongly…..[although], inter-related issues affecting global supply chains, rising input costs and staff availability present some near-term risks….Due to the improved economic situation our aim was to recommend a rate that put us back on course to meet the 2024 target set out in our remit.“
Outside of the April 2022 rate changes, the latest increases to the Real Living Wage and the London Living Wage took effect on the 15th November 2021. The Real Living Wage was increased by 40p per hour from £9.50 per hour to £9.90 per hour. The new rate means that the Real Living Wage is now £0.40 per hour higher than the new rate for the National Living Wage that will apply from the 1st April 2022, and £0.99 per hour higher than the current rate.
The London Living Wage increased by 20p from £10.85 per hour to £11.05 per hour. Accordingly, the London Living Wage is now £1.55 per hour higher than the new rate for the National Living Wage that will apply from the 1st April 2022, and £2.14 per hour higher than the current rate.
Katherine Chapman, the director of the Living Wage Foundation, stated at the time that the Real Living Wage and the London Living Wage rate increases were announced that: “For the past 20 years the Living Wage movement has shaped the debate on low pay, showing what is possible when responsible employers step up and provide a wage that delivers dignity. Despite this, there are still millions trapped in working poverty, struggling to keep their heads above water – and these are people working in jobs that kept society going during the pandemic like social care workers and cleaners."
Chapman adds: "We know that the Living Wage is good for businesses as well as workers, and as we rebuild our economy post pandemic, the real Living Wage must be at its heart.”
3rd April 2022
Another key part of the April 2022 rate changes are the increases in family friendly payments. These rate changes usually take effect on the first Sunday in April, which this year is set to be the 3rd April 2022. The increases in the rates are as follows:-
- Statutory Maternity Pay – those who qualify are entitled to receive it for 39 weeks at a rate of 90% of gross weekly pay per week, subject to a maximum of £156.66 per week (up from £151.97 per week) after the first 6 weeks.
- Statutory Paternity Pay – the smaller of £156.66 per week (up from £151.97 per week) or 90 per cent of average weekly earnings per week
- Statutory Shared Parental Pay – the smaller of £156.66 per week (up from £151.97 per week) or 90 per cent of average weekly earnings per week
- Statutory Adoption Pay – those who qualify are entitled to receive it for 39 weeks at a rate of 90% of gross weekly pay per week, subject to a maximum of £156.66 per week (up from £151.97 per week) after the first 6 weeks.
- Statutory Parental Bereavement Pay - will rise from £151.97 per week to £156.66 per week.
The average gross weekly earnings required to qualify for all of these benefits has risen from £120.00 or more to £123.00 or more.
Also, from the 3rd April 2022 as part of the April 2022 rate changes, where an employee earns less than £123.00 per week on average, but was employed for 26 of the 66 previous weeks earning at least £30 per week (averaged over any 13 week period during the said 66 weeks), then they are entitled to Maternity Allowance for 39 weeks of the smaller of £156.66 or 90 per cent of their average gross weekly earnings per week.
6th April 2022
Another key part of the April 2022 rate changes is Statutory Sick Pay (SSP), which from the 6th April 2022 will increase from £96.35 per week to £99.35 per week.
The average gross weekly earnings required to qualify for SSP has risen from £120.00 or more to £123.00 or more, and therefore matches the earnings threshold for Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay, and Statutory Parental Bereavement Pay.
April 2022 Rate Changes: The Statutory Cap
One of the final pieces of the jigsaw in terms of the April 2022 rate changes is the new rate for the statutory cap on what a weeks pay will be for the purposes of calculating the basic award and statutory redundancy pay.
The new rate for the statutory cap is expected to be announced shortly
