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What is the difference between Maternity Pay and Maternity Allowance?
Before we get into the ins-and-outs of Maternity Pay and Maternity Allowance for the self-employed, it's important to know how they both differ. Although they are both financial benefits for those expecting, Maternity Pay and Maternity Allowance differ when it comes to eligibility and payments.
Statutory Maternity Pay
What is Statutory Maternity Pay?
Statutory Maternity Pay (SMP) is a financial benefit provided by employers for pregnant employees who have been working for the company for a set amount of time.
These payments are made via the employee’s usual pay roll methods and are subject to normal national insurance and tax deductions.
Are you eligible for SMP if you are self-employed?
If you’re self-employed while working another job, you may be entitled to SMP. However, like those in employment through an employer, you must meet the criteria for eligibility.
How is Statutory Maternity Pay paid?
Employees who are eligible for Statutory Maternity Pay receive payments over 39 weeks. Usually in the following ways:
Maternity Allowance
What is Maternity Allowance?
Maternity Allowance, on the other hand, is a financial benefit that pregnant women who aren’t eligible to receive SMP from an employer can claim from the government. Maternity Allowance (MA) payments are made by the Department for Work and Pensions for 39 weeks. You’re only able to claim for MA, if you’re ineligible for SMP.
Maternity Allowance for the self-employed
The big question. Are self-employed people eligible for MA? There’s not one ‘size fits all’ answer to this, as it comes down to your individual circumstances and what you’re eligible for.
To be eligible to claim for MA, the following must apply to you:
- You’ve been under employment, or self-employed for a minimum of 26 weeks of the 66 weeks prior to your expected due date.
- You’ve had 13 weeks in which you have paid Class 2 National Insurance (NI) payments.
As you’re self-employed, you won’t be asked to show evidence of earnings. However, it’s likely that your NI record will be reviewed.
If you’re struggling to determine if you qualify, it may be an idea to fully review the government criteria around eligibility.
Are self-employed workers eligible for Maternity Allowance?
According to gov.uk, the criteria for self-employed people receiving Maternity Allowance depends on the length of time you’ve been registered as self-employed with HMRC. If you’ve been registered for up at least 26 weeks in the 66 weeks before you baby’s due, then you’re entitled to maternity allowance for up to 39 weeks. However, if you receive Statutory Maternity Pay from another job, this will void your entitlement.
You must be registered as self-employed with HMRC. If you haven’t registered as self-employed, you should do so as soon as possible if you want to claim MA. HMRC can accept late registration.
How much Maternity Allowance will I receive being self-employed?
When it comes to MA payments, the amount you receive will vary based on your situation. If you’ve made Class 2 NI payments for a minimum of 13 weeks of the 66 weeks before your due date, you’ll be paid the standard rate which is £184.03 per week. If you haven’t met the minimum payments for NI, you’ll receive less.
Am I eligible for MA if my baby is premature?
If you meet the set criteria to be eligible for Maternity Allowance but give birth earlier than expected, you’ll still be eligible for MA. Your Maternity Allowance will then start from the day after you give birth. If this happens you report the changes.
Am I eligible for MA if my baby is stillborn?
You’re still entitled to receive MA if your baby is stillborn after the 24th week of pregnancy, given that you meet the normal conditions to qualify for Maternity Allowance. You can find more detailed help and advice here.
If you’re not currently registered as self-employed and you’re unsure how, why not check out our step-by-step guide?
How do I apply for Maternity Allowance if I’m self-employed?
To apply for maternity allowance as a self-employed person, you’ll need to visit the gov.uk website here to complete the Maternity Allowance claim form. The form requires you to provide clear and accurate information to ensure your circumstances can be appropriately assessed.
In addition to completing the form, you’ll be asked to send documents to the address listed. To make sure you don’t miss anything that may cause your claim to be delayed, you should make use of the checklist within the form.
What documents do I need for Maternity Allowance?
When applying for Maternity Allowance as a self-employed person, you may be required to send proof of your due date and expected birth date. This can be an official letter from your doctor or midwife. Alternatively, you can provide your MATB1 certificate.
When should I apply for Maternity Allowance?
You’re able to claim MA from the 26th week of your pregnancy. To avoid any delays, it can be good idea to do this as soon as you’re able to.
How frequent are Maternity Allowance payments?
Payments are generally paid between every two to four weeks.
Do self-employed partners get paternity leave?
For self-employed partners, there is no equivalent to MA. In some cases, you’ll be able to claim for alternative benefits/universal credit if your family income is significantly reduced. You can find more information surrounding this here.
Navigating the world of self-employment can be tricky at times, especially when it comes to understand your rights and entitlements. To help, we’ve put together some handy guides on self-employed pensions and sick pay.
Plan for tomorrow, today
As you know, when you’re self-employed there may be times when the performance of your business impacts your own finances, and unlike working in employment, you can’t predict and guarantee a set amount of income.
It might be a good idea to start thinking about what retirement looks like for you. From there you can start to consider the level of savings you’ll need to have as a self-employed pension to make it happen. Prepare today for what’s to come later in life. Future You will thank you.
All links are checked and valid at time of publishing, 9 Sep 2024.