30 day rule

Under the 2015 regulations after a period of authorised unpaid absence, employers were obliged to provide details of the lost pensionable pay to the member and they then had an opportunity to purchase an APC to cover the lost pension for this period. The amending regulations now state that contributions are payable for the first 30 consecutive days of this type of absence. The result of this change is that there is no lost pension for this period, and no need for an APC (for absences less than 31 consecutive days).

Employers must include the relevant APP in the CARE totals provided in year-end annual returns.

If the authorised unpaid absence continues beyond 30 days, then contributions are no longer due from day 31 onwards. On return to work after the absence, employers must provide the employee with their lost pensionable pay and the option to purchase an APC to cover the lost pension relating to the period after the first 30 days.

There are no changes to other types of absence (i.e. unauthorised absence, relevant child related leave, strike, reserve forces leave, or absence due to illness or injury).

30 Day Rule FAQs

You no longer need to send LGS34 or 35 for authorised unpaid absences that are for less than 31 consecutive days. This is because contributions are due, and APP will apply during this period (and will be included in the year end CARE totals) so that there isn’t a reduction in pension savings.

NILGOSC does not require this breakdown on the LGS6 as pensionable pay (including APP) and employee contributions are the responsibility of the employer. You should ensure your processes are updated so that CARE totals in your annual return include any APP relating to this type of absence.

You may need to apply manual calculations and overrides. You will need to ensure that your manual adjustments to contributions are included in your annual return. Additionally, you will need to ensure that your manual calculation of the APP built up during this period is also included in your annual return CARE totals.

As contributions are paid during the first 30 days of this type of absence it means that there is no reduction in the member’s pension savings. You will need to update your processes to make sure that CARE totals in your annual return submission include appropriate APP amounts in relation to these absences.

The regulations do not stipulate a minimum period of absence, they just say that contributions are now due for the first 30 consecutive days of a period of authorised unpaid absence. If your employee is late in to work one day, do they lose an hour’s pay or are they paid for that hour and they must make up the lost time throughout the rest of the week? If it is unpaid, is this treated as authorised or unauthorised? If it is treated as unauthorised unpaid absence, then no contributions are payable.

Pending clarification from the Department, any absence on maternity leave (or similar family leave) will be considered as a whole. Therefore if an employee goes onto unpaid additional maternity leave (or similar unpaid family leave) the first 30 unpaid days are not dealt with under this changed regulation.  The employee will not pay contributions on this unpaid period but will retain the right to make APCs in respect of this period on return to work, if she or he so wishes, and the normal rules for APCs will apply.