Statutory Adoption Pay Tax/NI

Ned_Flanders

Statutory Adoption Pay & Financial Allowance

Not Sure where to post this but here goes!

We are currently going through the adoption process, and are nearly at the final hurdle.
We have been matched with a sibling pair, but one of the pair is not in full time school until september.

Right at the start of the approval process we informed the adoption agency that realistically we could not afford to adopt preschool age children, so any time off work for my wife would be limited to 6 weeks or so to fit in with this.

The local authority have offered to make up the difference in my wife's salary and the Statutory Adoption Pay for around the 4 to 5 months until both children are in full time school and she goes back to work.

This help is available because older schoolage children and sibling pairs end up in long term foster care until adulthood, so paying an allowance now helps the local authority in the long run. They mentioned this during assesment and sold the idea of a sibling pair to us.

Anyway my question is....

I need to calculate what the shortfall in wages would be. I obviously know the gross and net pay that she currently gets, and I know the gross amount of the statutory adoption pay, but dont know how much of this adoption pay would be taxed/national insuranced!

I'm not even sure if any money paid by the local authority is taxable.

Thanks

Ned_Flanders

Thanks blondebubbles

Her current salary is above any tax threshold,
But, If adoption pay started in April or May, earnings for the year 2014/15 would be back to zero or low , hence am I correct in think no tax payable?

Ned_Flanders

Thanks again, this gives me a bit of an idea how much the shortfall will be

tyllwyd

I wonder if you are over-complicating things - if you know your wife's gross pay and you can work out the gross amount of the statutory adoption pay, then surely the amount that the local authority should pay will be the difference between those two.


I've no idea how it would work exactly in terms of tax/NI, but as long as the total gross pay stays the same then the tax/NI bill should be no higher than it is now (and might possibly be slightly less if things work in your favour).


It does sound like a slightly unusual situation though, so I wonder if your wife might need to do a tax return for this tax year to make sure the right amount of tax is paid, and if she is paid gross you should be careful to put some aside to pay a tax bill later. I would try asking the local authority and HMRC for advice.

Ned_Flanders

Thanks for that, its only the tax element I'm not clever enough for, I'll get my wife to speak to her accounts man at work.