Help! I Don't Qualify for Statutory Maternity Pay (SMP)

Perhaps you don’t qualify for Statutory Maternity Pay (SMP) from your Employer as you haven’t worked there long enough or you don’t earn enough. 

Perhaps you are unemployed or maybe you are your own boss and SMP doesn’t apply to you. 

Don’t worry – there is other help available!

Maternity Allowance

If you are an Employee

Your employer should give you a form called SMP1.  This explains why they can not pay you SMP.  Call Jobcentre Plus on 0800 055 6688 and ask for a MA1 claim form or download one from HERE.

This is a form to apply for Maternity Allowance.  You will need to send in the SMP1 form, MATB1 form from your Midwife and proof of earnings in the form of original payslips.

You must have worked at least 26 weeks of the previous 66 week period before the week your baby is due.  In 13 of those weeks, you must have earned at least £30 per week.  

When you are collecting your payslips, choose the 13 weeks where you earned the most. If you are paid monthly, send 4 months worth of payslips in with your highest earnings.

The standard weekly rate of Maternity Allowance is £139.58.  

If your average weekly amount is less than this, you will receive 90% of that average amount.

Maternity Allowance is paid for 39 weeks.

For the recently unemployed

Mums to be who have recently become unemployed may also qualify for Maternity Allowance.  If you have worked for 26 weeks during the 66 weeks before your baby is due and have earned more than £30 in 13 of those weeks, you can apply as above.

For Self Employed Mums-to-be

Call Jobcentre Plus on 0800 055 6688 and ask for a MA1 claim form or download one from:

www.dwp.gov.uk/advisers/claimforms/ma1_print.pdf

HMRC will be asked if your Class 2 National Insurance Contributions are up to date.  If they are, you are entitled to the full weekly rate of Maternity Allowance of £139.58 for 39 weeks.

If you have a Small Earnings Certificate, your maternity allowance will be treated as if you earn £30 per week and so will receive only £27 per week (90%) for 39 weeks. 

Perhaps consider cancelling your Small Earnings Certificate as soon as you know you are pregnant and start to pay the full Class 2 NI Contributions (currently £2.75 per week).

Please read our guest post Self Employed? Protect your right to Maternity Allowance 

Recent changes could mean that new Mums who are not employed or self employed but have helped out in their self-employed Husband's or Civil Partner's business on an unpaid basis, are entitled to 14 weeks of Maternity Allowance.

For more information on this and a full guide to the Maternity Allowance, please refer to the claim form or: www.gov.uk/maternity-allowance/eligibility

If you do not qualify for Maternity Allowance

You my qualify for 8 week’s worth of Employment and Support Allowance (ESA) instead.  You need to be on a low income but also have paid some National Insurance over the past few years.

ESA replaced Incapacity Benefit.  Mothers are considered as having  “limited capability to work” due to pregnancy from 6 weeks before the baby is due until 2 weeks after.

You can fill in the MA1 form for Maternity Allowance as above.  Some of the question will not apply to you so leave them blank and in Part 9 “Other Information” state that you would like your claim to be considered for ESA.

For more information visit: www.gov.uk/employment-support-allowance

Quick Guide to Tax Credits

Tax Credits are payments from the government that you could be entitled to if you have children.  There are 3 different types of tax credits:

Child Tax Credits: if you are responsible for children, you may qualify for Child Tax Credits. You don’t have to be working to claim Child Tax Credits.

Working Tax Credits: these are available for people who do or don't have children and who work 16 hours or more a week, but are on a low income.

Child Care element of Working Tax Credit: help with your childcare costs. 

You may qualify for these even if you don’t qualify for Working Tax Credits.

Your entitlement will depend on your household income.

Visit: www.gov.uk/qualify-tax-credits-quick-questionnaire to see if you qualify – you may be pleasantly surprised! 

Unfortunately you can not claim online so you will need to get a claim pack by phoning the Tax Credit Helpline:

0345 300 3900

It’s REALLY important to keep the Tax Credit office up to date with ANY changes in your personal circumstances and income as soon as they happen.  That way, you are more likely to avoid being in an overpayment situation and face having to pay large sums of money back, and you can ensure you are receiving the right amount.

For more information visit: www.gov.uk/child-tax-credit

Other help for families

To see if you qualify for any other help, use a benefits checker such as:

www.moneysavingexpert.com/family/benefits-check

or

www.turn2us.org.uk/benefits_search.aspx

Self Employed? Protect Your Right to Maternity Allowance

Filling in a form to claim Maternity Allowance when you are a self employed Mum sounds pretty straight forward, but there is a MAJOR issue if you hold a Small Earnings Exemption Certificate.  A major issue that could see you losing out on thousands of pounds!

I came across this fantastic article by Frances Weir on Helen Lindop's great website www.businessplusbaby.com and felt I had to share it with you - it is too important to miss if you are a self employed mum-to-be or thinking of becoming one. 
A HUGE thank you to Frances and also Helen for letting me feature it.

The rules state that you must register with HMRC as self-employed within 3 months of starting trading. When you register, you will be given the choice of either:

• paying Class 2 national insurance contributions (currently £2.75 per week),

or

• completing a Small Earnings Exception Certificate (if you expect your earnings to be less than £5,885 a year), thus not pay any national insurance.

You can choose to pay Class 2 contributions regardless of how low you expect your income to be. But (if eligible) the obvious temptation for start-ups is to opt for the Small Earnings Exception Certificate – it saves you £2.75 a week at a time when you’re unlikely to be making any profit.

However, this has huge financial implications in terms of Maternity Allowance.

If you have been registered as self-employed for at least 26 weeks in your ‘test period’ (the 66 weeks before your due date), you’ll get some MA. If you have paid Class 2 contributions for at least 13 weeks in your test period, you’ll get the maximum rate (£138.18 a week for 39 weeks). But if you have held a Small Earnings Exception Certificate you’ll only get the minimum rate (£27 a week for 39 weeks); a huge £4,336.02 difference over the maternity period.

As a comparison, 13 weeks of Class 2 contributions costs £35.75 – go do the maths!

And here’s the important small print: for any week you have held a Small Earnings Exception Certificate, you’ll only ever qualify for the minimum MA, even if you have been voluntarily paying Class 2 contributions as well (this is to stop you getting pregnant and then paying Class 2 contributions in order to get maternity allowance!). If you want to work the system in this way, you must get your Small Earnings Exception Certificate cancelled first. The cancellation takes about a month to process so obviously you would want to do this soon after getting pregnant to ensure you have a clear 13 weeks of paying Class 2 contributions without holding a Small Earnings Exception Certificate, within your test period.

Not sure you will get pregnant? Opting to pay Class 2 contributions is a no-risk strategy – you’re entitled to reclaim the contributions made in a financial year if you subsequently find that your earnings fall below the £5,885 threshold of the Small Earnings Exception Certificate (if you plan to do this, look into it early on to ensure you meet the deadlines involved).

Don’t forget, Class 2 contributions also count towards other important benefits for the self-employed mum – the basic state pension, employment and support allowance and bereavement benefit.

I hope this clears up some of the confusion regarding MA. There is a great deal of mis-information on the internet – I’ve seen articles on mumpreneur websites recommending that start-up business mums opt for the Small Earnings Exception Certificate without any discussion of the impact it has on maternity benefits. Self-employed mums need to be aware of the financial implications of holding a Small Earnings Exception Certificate if there is any chance they might become pregnant in the future. And if anyone reading this is pregnant but holds a Small Earnings Exception Certificate, act fast to extinguish it!

This article is not applicable to women who are both self-employed and employed.
Please check the latest advice from the Department of Work and Pensions before relying on information presented here.

Frances and Helen are on a mission to make sure every self employed mother gets the maternity pay they are entitled to, so please spread the message!