A woman on maternity leave is eligible for Maternity Allowance if she does not qualify for statutory maternity pay. Maternity Allowance is paid weekly via Jobcentre Plus for a period of up to 39 weeks.
The commencement of your Maternity Allowance pay-outs depends on the expected week of childbirth and not the actual date of childbirth.
No income tax or National Insurance contributions will be payable on Maternity Allowance.
Qualifying for Maternity Allowance
To qualify for Maternity Allowance, you must in addition to being pregnant satisfy at least one of the following requirements: -
- be an employee but not qualify for statutory maternity pay;
- be registered as self-employed and pay Class 2 National Insurance Contributions; alternatively, be registered as self-employed and a holder of a Small Earnings Exception certificate; or
- be recently employed or self-employed.
If you are employed by more than one employer and are receiving statutory maternity pay from one of these employers but not the other, you do not qualify for Maternity Allowance. In the same vein, if you are self-employed while at the same time employed by an employer from whom you are eligible to receive statutory maternity pay, you may not claim Maternity Allowance.
If you are eligible to work and live in the UK but your visa stipulates that you shall have “no recourse to public funds”, this does not automatically mean you are ineligible for Maternity Allowance. It is still possible that you may qualify for Maternity Allowance provided you satisfy qualifying conditions based on your recent employment and wage records.
A closer look at eligibility for Maternity Allowance in the UK
Other than not receiving statutory maternity pay from any employers, you must abide by two rules to qualify for Maternity Allowance. The two rules are The Employment Rule and The Earnings Rule. Both rules must be satisfied during the period of 66 weeks leading up to and including the expected week of childbirth.
The Employment Rule in Maternity Allowance
To satisfy the Employment Rule, you need to have been in employment or self-employment for a minimum period of 26 weeks. These 26 weeks must fall within the period of 66 weeks leading up to and including the expected week of childbirth.
So long as you were officially employed or in self-employment for the requisite number of weeks during the relevant period, you satisfy the Employment Rule regardless of whether you were present at the workplace. Therefore, if you were an employee for 26 weeks during the relevant period but took 10 weeks of medical leave during those 26 weeks, your eligibility will not be adversely affected. Weeks where you were employed only part of the week count as full weeks towards your 26 weeks.
If you are self-employed, you must ensure you are effectively registered with HM Revenue and Customs in accordance with their rules and regulations to qualify for Maternity Allowance.
The Earnings Rule in Maternity
You must be earning on average at least £30 a week to qualify for Maternity Allowance. If you are employed by more than one employer or self-employed and employed at the same time, your total earnings will be considered in the calculation of your average wage.
Calculation of average wage for Maternity Allowance
You will need to submit a calculation of your average weekly earnings in your application for Maternity Allowance.
You should select any 13 weeks falling during the 66 weeks leading up to and including the expected week of childbirth. The 13 weeks do not have to be consecutive. You may choose any weeks at your discretion, so if your wages vary over the 66-week period you may choose the weeks during which you earned the most. Earnings from multiple employers and self-employment for each week can be combined.
If the average wage during the 13 weeks you have selected works out to be at least £30 a week, you will be eligible for Maternity Allowance.
Gross earnings for employees
If you are an employee the calculation of your average wage will be based on your gross earnings during the 66-week period up to and including the expected week of childbirth.
Gross earnings are defined as wages before any deductions, tax or otherwise. Ordinary statutory adoption pay, statutory maternity pay, statutory paternity pay, additional statutory paternity pay and statutory sick pay may all be included in the calculation of gross earnings.
If you are not paid on a weekly basis but at greater or smaller intervals, such as intervals of a month, your weekly earnings will be calculated by Jobcentre Plus based on evidence of payment submitted by you.
If you are a participant in a salary sacrifice scheme, for instance if you have agreed to sacrifice a portion of your earnings to obtain certain benefits from your employer such as childcare vouchers, your earnings will only be assessed based on your gross earnings. This means the value of any non-monetary benefits such as childcare vouchers will not be considered when assessing your earnings for the purposes of determining eligibility for Maternity Allowance.
Bursary scholarships awarded to students are not considered when calculating earnings. If you are self-employed but are not a holder of a Small Earnings Exception certificate, you should ensure you pay Class 2 National Insurance Contributions. For each week of earnings for which you have paid Class 2 National Insurance Contributions, you will be treated as having received the standard rate of Maternity Allowance. From 9 April 2012, the standard rate of Maternity Allowance is £150.50 a week.
If you are self-employed and a holder of a Small Earnings Exception certificate, you will be assessed as having earned £30 per week for each week you are covered by the certificate. Even if you have paid Class 2 National Insurance Contributions on any of the weeks, so long as they are covered by the Small Earnings Exception certificate you will be treated as having earned £30 in those weeks.
If you are both employed and self-employed, your combined earnings will be assessed for Maternity Allowance allocation.
If you are unsure as to whether your rights have been breached, the employment law specialists at Lloyd Donnelly Solicitors can aid.
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