PART 1: DATES, DEFINITIONS AND OBLIGATIONS
Statutory Sick Pay SSP is due up to and including the date of death, subject to all other entitlement conditions being met. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS Statutory Adoption, Maternity, Paternity and Shared Parental Pay These are payable to the end of the week (usually Saturday) in which death occurred. Lump sum payments on death Where these are paid from a registered pension scheme where no associated pension is payable they are treated as a taxable unauthorised payment which is paid over by the scheme administrator and reported under Self-assessment by the deceased’s representative. Where a new scheme has been set up since April 2006 to make ex-gratia payments on death this is to be treated as an Employer-Financed Retirement Benefits Scheme (EFRBS) from which all benefits provided are fully taxable under PAYE. Payments from an EFRBS can only be tax-free where: • the scheme rules providing for an ex-gratia to be provided in a non-accidental death situation during service were in place before 6th April 2006 • the employee has been charged tax on the employer contributions which funded the lump sum, or • the payment is in respect of ill-health or disablement or death as a result of an accident whilst the deceased was an employee • they are benefits under a group life policy or certain prescribed individual life policies. Tax is due at 55% (35% for deaths prior to 6th April 2011) on payments made to anybody other than an individual. Other lump sums paid on death attract no NICs liability but are in general subject to tax. Employee under notice Where the employee was under notice, for what was held to be unfair dismissal, the date of death becomes the date of dismissal. No printing, copying or reproduction permitted. Payment after death In all cases there will be someone, or a third party, responsible for the collection of all outstanding monies due, and payment of all debts and distribution of any estate. This is usually, but not always, the next of kin. Documentary evidence supporting a representative’s rights must be obtained. It is the employer’s responsibility to establish the recipient’s right to receive the money. Where the amount of money held is small and there are no complicating issues, documentary evidence such as birth and/or marriage certificate may be sufficient to support the identity of the next of kin. Where the sum payable is more substantial it would be advisable to seek further evidence of legal entitlement, in the form of a grant of representation (see entry under Probate). Each employer should determine reasonable conditions. It is difficult to establish exactly how much constitutes a “small” estate. The Administration of
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