Publish date: 8 December 2022
The Department of Health and Social Care have provided an update on part time members working overtime.
The update confirmed that where a part time member works additional/extra hours paid at standard rate and the increase in their annualised pay (up to their whole time equivalent hours) causes the member to move into a different pensionable earnings band, this should be treated as an in-year change to pay.
The example in the updated guidance is as follows;
“A member works part-time and earns an annual salary of £23,945. The member’s contribution rate is 6.8%. However, in November, the member works additional/extra hours. As there has been a change in the member’s pensionable earnings, the employer must re-estimate their annualised pay. The employer estimates that the member’s annualised pay is £24,245 and moves the member into a new contribution tier (7.7%). The member doesn’t work any additional hours in December so again, the employer recalculates the member’s annualised pensionable earnings (now £23,945) and assigns the relevant contribution rate (6.8%), which takes effect in the next payroll period.”
This could result in multiple changes to staff members contribution rates in year. Please be aware that this is currently a manual task for payroll while ESR is scoping out a solution to support payroll departments with managing this task.
The updated guidance can be found on NHS Business Services Authority's website, under the section “Changes to member contributions” and “information for your payroll provider”.