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How will maternity pay rates affect you?

Dr John Couch discusses the implications for practices of the proposed maternity pay increases for principals, a move that he believes has come not before time

Dr John Couch discusses the implications for practices of the proposed maternity pay increases for principals, a move that he believes has come not before time

Rising locum costs and an increasingly female workforce have dramatically increased the burden of maternity cover on practices in recent years. Among the recently announced details of the hatching agreement on funding, and the QOF changes being negotiated between the BMA and NHS, there was a very welcome increase in maternity pay for principals. This is not before time, so what are the implications for practices?

The figures

Currently the maximum weekly payment for maternity cover when a principal takes maternity leave is £978.91 per week. Provided the details released are ratified (and the whole package also depends on some delicate negotiations on principals' pensions) the payment will go up to a maximum £1,500 per week, probably from April 2006.

This represents an increase of 53 per cent. Although seemingly a large amount, in actual fact locum costs have risen steeply in recent years and the new figure only just covers the basic work that a partner would normally do.

A full-time principal would normally cover eight two-and-a-half-hour surgeries and perhaps four visits per week. Locum costs vary, but at an average £70 per hour the weekly cost of covering only the above duties would be £1,540 per week. In many areas, especially where agency rates are paid, this figure would be nearer £2,000 per week. Of course a principal does much more than just these basic duties. There is other clinical work, including QOF and enhanced services, as well as non-clinical tasks. These would fall on the remaining partners. The smaller the practice the more difficult this becomes. It is difficult to quantify this work exactly but it would represent at least an extra five hours per week.

The rules

In order to claim the maternity allowance, practices must be very careful to follow the rules. The first of these is that the maternity allowance is payable from the third week of absence up to the 26th week. There is no allowance after this time.The PCT should be informed in advance. This will reduce the chances of any disagreement or delays in payment.

You must agree the time status of the partner going on leave. Do they fit the criteria for a full allowance? If not you must agree the correct proportion of maternity pay. Remember that only NHS work counts. If the partner does enough private work to eat into the maximum NHS requirement, the allowance will be reduced pro rata.

The allowance will only be paid if a locum is actually employed. The partners cannot provide cover themselves; payment would be refused in this situation. Most PCTs will allow an existing salaried GP or GPs already employed by the practice on a part-time basis to be paid as a locum to cover the extra time. You should get prior agreement from your PCT if you plan to do this.

Claims are paid monthly in arrears. Make sure you complete the correct forms and send them, with proof of locum payment, to the PCT well before the payment cut-off date. Accepted proof is usually a list of locum sessions signed by the locum(s). If you are using several locums you must be organised to collect signatures, especially if using an agency where the faces often change.

It makes sense to get signatures at the end of every session to avoid problems.Check carefully for receipt of payments and chase them if they fail to arrive. At one stage last year we had three doctors on maternity leave and payment did not arrive one month. The reason was the usual payment officer had also gone on maternity leave!

Keeping costs down

It pays to arrange locum cover well in advance if possible. Generally, it will be cheaper to find locums directly rather than via an agency. Many locums prefer the security of a long period of work and reduce charges accordingly. Practices must be very careful to avoid the effects of on-costs where possible. The Inland Revenue has very strict rules about what constitutes employment as opposed to self-employment.

Many practices use the same maternity locum to provide the whole six-month cover. Under HM Revenue and Customs rules this would count as employment and on-costs would be payable. With national insurance and NHS superannuation this would increase your costs by 25 per cent.

You must check these rules with your accountant before taking on any locums. It may be more sensible to have three or four shorter periods of cover, using different self-employed locums rather than one locum you would have to employ for the six-month period. Failure to do this could cost you more than £10,000 unnecessarily.

Who gets the money?

Partnerships are not bound by employment law on maternity pay. What matters is the wording in your partnership agreement. An average agreement allows for the first three months of maternity leave locum cover to be paid by the partnership.

After this time the doctor on leave pays for locum cover but also receives the maternity allowance up to the time it runs out after 26 weeks. Most partners have returned to work by this stage. During this time it is usual to continue to receive the normal profit share via monthly drawings and any extra distributions. Few agreements allow for longer periods of time off, and if agreed this would generally be unpaid.

It is also usual to give separate notices of leave and return to work dates, one month prior to each date.Unfortunately many practices still do not have practice agreements. In this case it is for the partners to negotiate a package well in advance. Agreement must be in writing.

Sting in the tail

There is one note of caution. Payment will be at the discretion of the PCT. While most are good at paying the allowance, reports of cash-strapped PCTs are worrying. By not making the payment a statutory require-ment, the Government is giving PCTs an opt-out. I have no doubt that some will follow this path. Practices and LMCs must resist this vigorously.

Finally, no announcement has been made about locum allowances for GP sickness. Maternity and sickness allowances have always been linked and with luck will remain so.

John Couch is a GP in Ashford, Middlesex

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