So you’re super busy building an amazing business around your family, when something fabulous happens…
You discover you’re pregnant! Congratulations!
You crack open a bottle of Shloer (my faves the sparkling white grape juice) pour yourself a fluteful and feel rather pleased with yourself. But then… all of a sudden you remember that you’re self employed and that no work quite probably means no money!
Panic! How will you pay the mortgage, the weekly food bill or your Netflix subscription? You’re faced with working your butt off whilst growing a baby to save enough to cover your maternity leave or accepting destiution and life in a cardboard box.
Don’t panic lovely biz mum. There’s more help available than you think…
Step forward… Maternity Allowance! Maternity Allowance is an earnings replacement benefit payable to self-employed women (and also women who have been helping with a partner’s business) who are:
- pregnant or
- have recently had a baby or adopted a child.
You can make a claim for Maternity Allowance as soon as you’ve been pregnant for 26 weeks and payments can start from 11 weeks before your expected week of childbirth. Maternity Allowance is not taxable and will also be ignored as income for any Tax Credit claims you’re also making. Hurray!
Are you eligible to claim Maternity Allowance?
- You must be a pregnant, have recently had a baby or adopted a child
- You must have been self-employed (or employed) for 26 weeks in the 66 weeks immediately before your expected week of childbirth, or
- You may also be able to claim based on helping a spouse or civil partner with their self-employment
- You must not be entitled to Statutory Maternity Pay through an employer, previous employer (if you’ve recently left), or your own limited company
[pullquote align=”normal”]The ‘expected week of childbirth’ is the date of the Sunday before your baby is due. If your due date fall on a Sunday then it is that date. [/pullquote]
How long is Maternity Allowance paid for?
You can claim Maternity Allowance for up to 39 weeks if you are claiming on the basis of your own self-employment. You can choose to end this early so that your partner can qualify for statutory shared parental pay from their employer and/or shared parental leave from work.
You can claim Maternity Allowance for 14 weeks if you are claiming on the basis of helping your spouse or civil partner with their self-employment and you are not employed or self-employed.
How much Maternity Allowance will you get?
£139.58 a week – For the full amount of Maternity Allowance you must have paid Class 2 NI contributions for at least 13 weeks of the 66 weeks immediately before your expected week of childbirth, and not have a small earnings exemption.
Important note: How Class 2 NI is calculated and collected has recently changed for the self-employed. This is now done after the end of the tax year, via your Self Assessment tax return. If you haven’t filed your Self Assessment yet, don’t worry. Still make your claim for Maternity Allowance and the DWP will write to you to let you know you don’t meet the NI contribution conditions. HMRC will then contact you to tell you how to make an early payment so that you do.
90% of your average weekly earnings – If you have not paid Class 2 NI contributions for at least 13 weeks of the 66 weeks immediately before your expected week of childbirth (or chose not to make an early payment, as above) and did not have a small earnings exemption you can calculate your earnings by adding together any 13 weeks earnings in that 66 week period, then divide it by 13. Use the highest earnings figures you have, as your Maternity Allowance amount will be 90% of this.
£27 a week for 39 weeks – If you had a small earnings exemption, or have not paid voluntary Class 2 NI contributions that you could have done, you will be treated as having earnings at least equal to the Maternity Allowance threshold of £30 a week. Your Maternity Allowance will be 90% of this (£27).
£27 a week for up to 14 weeks – This is the maximum you can claim Maternity Allowance for if you are claiming on the basis of helping your spouse or civil partner with their self-employment and you are not employed or self-employed.
If you’re not sure which applies to you, you can use this very handy maternity entitlement calculator to work out how much you should get.
Does Maternity Allowance affect other benefits?
Maternity Allowance won’t be counted as income for your Tax Credit claim and you will still be classed as being in work so you can continue to be eligible for Working Tax Credit.
Maternity Allowance will be counted as income for other benefits such as Housing Benefit, Council Tax Support, bereavement benefits and Carer’s Allowance. It may affect how much you get. You should report your claim for Maternity Allowance to anyone else you claim benefits from as soon as you have a decision confirming your claim.
How to make a claim for Maternity Allowance
Grab a pen, you need to complete form M1 and send this to the address on the form. It might be helpful to take a copy and get proof of posting (free of charge) in case of any problems. You will also need to supply evidence such as your MATB1 certificate or a letter from your midwife or doctor with your due date.
Remember, you can’t make your claim until 26 weeks of pregnancy. However, you can apply late (without needing to give a reason) and have your claim backdated for up to 3 months.
You should get a decision on your claim within 14 working days. If you’re eligible, a form will be sent to you confirming your entitlement and asking you to confirm your last day of working.
Can I still work on my business whilst claiming Maternity Allowance?
Your Maternity Allowance is not affected if you work 10 days or less. However even just an hour working on your business counts as a full day, it doesn’t matter whether you earn any money or not. If you do more than 10 days work the DWP can disqualify you for as long as is reasonable given the circumstances, and this must be for at least the number of days you have worked in excess of the 10 days allowed.
What about affiliate income, passive income, book royalties or other money owed?
Maternity Allowance is an earnings replacement benefit. If you earn any money from your self-employment during a claim for Maternity Allowance (even without doing any work), you should report this as soon as possible for it to be taken into account.
Not happy with your Maternity Allowance decision?
If you are not happy with the decision on your Maternity Allowance claim, generally you have a month from the date on your decision letter in which to ask for this to be revised. You will need to ask for a ‘mandatory reconsideration’ which can be done by phone or letter and you should point out facts which you think are wrong, or information you think they have missed or not taken into account. This is always worth a try as a high percentage of decisions are changed at this point.
If the decision is not changed in your favour you will have the chance to make an appeal which goes to a Tribunal. It would be wise to seek assistance from a Law Centre, community law service, County Council welfare benefits team or Citizens Advice at this point.
A recent Self Employment Review by Julie Deane, commissioned by the Government, recommended enhancing the level of Maternity Allowance provided in the first six weeks to help bring it inline with Statutory Maternity Pay – an idea we fully support here at Savvy Mums Business.