Currently there are two types of Income Contingent Student Loans however, only one is repaid via deduction through payroll. Income Contingent Loans pre-September 2012 are known as Plan 1 loans and are currently operated through payroll. Loans taken out post-September 2012 are known as Plan 2 loans and are currently repaid outside of the payroll directly to the Student Loans Company.
From 6 April 2016 Plan 2 loans will also be calculated and repaid via deduction from payroll. Employees repaying under the existing threshold will not be affected by the change.
Plan 1 Loans - £17,495 per annum
Plan 2 Loans - £21,000 per annum
Key employer facts:
• Employers will never be asked to operate more than one plan type at a time for an employee
• The main employer notice will continue to be the SL1 start notice, every SL1 issued will indicate which plan type should be operated
• From the 6th April 2016, the starter declaration checklist will prompt employers to ask new employees about their student loan plan type
• The P45 will not be amended, it will continue to indicate if employees were repaying a student loan in their previous employment but it will not specify if it was a Plan 1 or Plan 2 loan
• If new employees cannot say which Plan type they have, the default for employers is Plan 1
• If this is incorrect, HMRC will be sending a SL1 anyway once the new employee information is sent on the first FPS
• If applicable, the Plan type can be amended within the payroll software
Further information can be found in HMRC’s August 2015 Employer Bulletin
Chancellor George Osborne has announced that he will extend shared parental leave and pay to working grandparents, in recognition of the crucial role that working grandparents play in providing childcare for their families.
Approximately seven million grandparents are said to be involved in childcare, with evidence suggesting that nearly 2 million grandparents have given up work, reduced their hours or have taken time off work to help their families who cannot afford childcare costs. More than half of mothers rely on grandparents for childcare when they first go back to work after maternity leave, and over 60 per cent of working grandparents with grandchildren aged under 16 provide some childcare.
Consultation on the new measure will begin in the first half of 2017, with the aim of implementing the policy by 2018. The extension of shared parental leave and pay to working grandparents will ensure that hardworking families can structure their lives in a way that will work best for them and will provide flexible working arrangements for grandparents without the fear of losing their job.