Maternity Pay/ Allowance - am I entitled to this as a contractor?

[yorkshire_contractor]

Hello

Ive been working as a contractor (limited company status) since Jan 2009, and am due to give birth mid Dec 2009. My contract ends at the end of Nov 2009; and i wont receive any further income.

So how does it work when youve been a contractor? I dont think I would get SMP (statuatory maternity pay) as not been employed by an employer etc - is this right?

So would I be entitled to Government Maternity Allowance ?

It says you can get up to a maximum of £123.06 p/week "or 90 per cent of your average gross weekly earnings (before tax), whichever is the smaller." ?

The website only provides information on those self-employed or permanently employed, and says id have to submit payslips etc; but as i worked as a contractor i have been paid a minimum wage (wage slips) and dividends etc.

Admin note: Further reading: Umbrella company maternity pay

If I send in the wage slips would i get the 90 per cent of your average gross weekly earnings (which would be tiny amount)? or if I submit my payslips and dividend statements which shows i earned over £50k for example; then would I not be eligible for Government Maternity Allowance as expected to fund myself - is it means tested? etc

many thanks

[northernladuk]

I don't know the answer but arn't you on a see-saw here. If you gross it up to the 50k your going to lose the WTC from your other post but gain better Maternity or dumb it down for WTC and get minimal Maternity pay?

Might be worth putting both questions in one post as one answer is going to affect the other and leave you with a third question which is 'Which is most beneficial?' (assuming you have the option to dumb down or inflate your income depending on declaring dividends)

[Darren@UptonAccountants]

Salary

Would suggest you speak to your accountant about the level of salary going through the company which may help the SMP situation.

[chris79]

Hi,

Firstly congratulations on your forthcoming baby.

From what I know you are eligible as long as you've worked for a set period of time on your company payroll (paying tax/NICs).. I think it's 26 weeks.. there's some criteria which has to be met, the fact you are under your own company shouldn't make a difference.. my partner is an employee of our company and she qualified last year..

http://www.businesslink.gov.uk/bdotg...cId=1080898273

[BolshieBastard]

Hello

Ive been working as a contractor (limited company status) since Jan 2009, and am due to give birth mid Dec 2009. My contract ends at the end of Nov 2009; and i wont receive any further income.

So how does it work when youve been a contractor? I dont think I would get SMP (statuatory maternity pay) as not been employed by an employer etc - is this right?

So would I be entitled to Government Maternity Allowance ?

It says you can get up to a maximum of £123.06 p/week "or 90 per cent of your average gross weekly earnings (before tax), whichever is the smaller." ?

The website only provides information on those self-employed or permanently employed, and says id have to submit payslips etc; but as i worked as a contractor i have been paid a minimum wage (wage slips) and dividends etc.

If I send in the wage slips would i get the 90 per cent of your average gross weekly earnings (which would be tiny amount)? or if I submit my payslips and dividend statements which shows i earned over £50k for example; then would I not be eligible for Government Maternity Allowance as expected to fund myself - is it means tested? etc

many thanks

please tone down your remarks, bb. they are out of order here! thanks, sp.

[chris79]

Oh FFS! These type of people should not be allowed to be ******* contractors.

If you want permie benefits, stay as a permie.

Maternity pay isn't exclusive to being an employee of someone else's company, it also applies to your own? Why would she want to miss out on something she's entitled to?

[yorkshire_contractor]

In response to Bolshie Bastard (what an apt name!)

I just wondered what you mean by "These 'type' of people (should not be allowed to be ******* contractors)"?

do you mean "women"? ...women who may (shock horror) get pregnant by men? ...why didnt you know, our brains fall out when we are impregnated by the greater race of 'man' and we are no longer capable to work on a contractual basis!

what 'type' of contractor are you? an ignorant sexist one? (...good luck!!)

thank you to everyone else for your helpful responses. I am not on any benefits and never have been, although i work full time and have a 2 year old daughter (went back to contracting when she was 4 months old), and am pregnant with my second, I just wondered whether I would be entitled to any maternity allowance, as I didnt think i would be as have earnt over a certain threshold; but would be good if I could, as it all helps with having two children!

[Lewis]

Hello

Ive been working as a contractor (limited company status) since Jan 2009, and am due to give birth mid Dec 2009. My contract ends at the end of Nov 2009; and i wont receive any further income.

So how does it work when youve been a contractor? I dont think I would get SMP (statuatory maternity pay) as not been employed by an employer etc - is this right?

So would I be entitled to Government Maternity Allowance ?

It says you can get up to a maximum of £123.06 p/week "or 90 per cent of your average gross weekly earnings (before tax), whichever is the smaller." ?

The website only provides information on those self-employed or permanently employed, and says id have to submit payslips etc; but as i worked as a contractor i have been paid a minimum wage (wage slips) and dividends etc.

If I send in the wage slips would i get the 90 per cent of your average gross weekly earnings (which would be tiny amount)? or if I submit my payslips and dividend statements which shows i earned over £50k for example; then would I not be eligible for Government Maternity Allowance as expected to fund myself - is it means tested? etc

many thanks

Congratulations.

If you are not employed you can claim Maternity Allowance. If you are working you can claim Statutory Maternity Pay. SMP is paid to you via the company (company has to reclaim money from taxman) whereas MA goes direct into your account.

Details here http://www.direct.gov.uk/en/MoneyTax...en/DG_10018869.

http://www.direct.gov.uk/en/MoneyTax...en/DG_10018741

Assuming you want to keep the company running then you need to claim SMP. Your accountant will be able to sort it all out for you. But basically to be eligible you need to meet the following criteria:

* employed by the same employer continuously for at least 26 weeks into the 15th week before the week your baby is due
* earning an average of at least £95 a week

If you started in Jan 09 and Baby is not due till Dec 09, I think you should be ok.

You will then get

* for the first six weeks at 90 per cent of your average gross weekly earnings with no upper limit
* for the remaining 33 weeks at the lower of either the standard rate of £123.06, or 90 per cent of your average gross weekly earnings

You might want to consider increasing your salary to ensure you get the full amount. You pick something like 6 (can't remember exact amount) payslips and your salary is taken from them, so you can increase your salary from now-ish so that what you have paid so far is not used to determine the 90% amount. But you need to work out the benefit of this vs the extra tax you will pay on the larger salary - again speak to you accountant.

If you want to close the company - you need to give yourself your P45 at just the right time to ensure you qualify for MA. You would also probably want to increase your salary now to ensure you get the full amount.

I think you will have no issues but you need to do your figures now as you don't have much time to sort it all out so you get the maximum allowance.

[NotAllThere]

Cool. I think I'll have to go home and pay my wife a surprise visit.

[daviejones]

Cool. I think I'll have to go home and pay my wife a surprise visit.

Yeah, I did, I know she likes it