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Mouthy Money’s regular, Finance Dee, answers your questions about maternity rights: pay, leave and benefits explained.
What an exciting time in life when you find out you’ve got a bundle of joy on the way!
But when the dust settles a little, it can become a little daunting to think through all that needs arranging ahead of the big life change, let alone be up-to-date about maternity rights.
Among many other things, planning for maternity leave is a high priority.
Two of the most important things to consider when planning maternity leave is figuring out what you are entitled to in terms of pay, and thus how much time you can afford to take off.
It is believed that this is likely due to maternity pay being insufficient for the full 52 weeks.
Statutory Maternity Pay (SMP) and Maternity Allowance
SMP is the standard payment package for eligible employees during maternity leave (information on eligibility is available here).
SMP offers 90% of one’s weekly average earnings in the first six weeks, and £156.66 per week or average weekly earnings (whichever is lower) for the next 33 weeks.
It is important to remember that taxes and national insurance still get deducted on SMP, as will any pension contributions made before starting maternity leave unless you specifically opt-out.
For employees who are not eligible for SMP, or for those who are self-employed, a very similar package exists called maternity allowance.
This allows mothers to receive 90% of one’s weekly average earnings or £156.66 per week (whichever is lower) for a total of 39 weeks.
For both SMP and maternity allowance, the final 13 weeks would be unpaid if a mother decides to take the full 52 weeks she’s entitled to.
Enhanced Maternity Pay
Some companies go a step further than SMP and offer their employees enhanced maternity pay.
These maternity packages are at a company’s discretion, i.e. not standard maternity rights, and can vary widely between businesses.
Whether your employer offers an enhanced maternity pay package or not will be an integral part of information you will need when planning your maternity leave.
Other income sources during maternity leave
In addition to the SMP, maternity allowance, or enhanced maternity pay, there are other income sources that you may be entitled to.
Child benefit is a payment made by the Government of £21.80 per week for the first/eldest child, and £14.45 per child for any additional children.
This payment can be claimed soon after the baby is born, and will be paid all the way up until the child is 16, or until they leave formal education.
Those who live in a household where one person earns more than £50,000, child benefit will be reduced. For those who earn more than £60,000, all of the child benefit would be lost through tax, if claimed.
For mothers on lower incomes, there are programs such as the Sure Start maternity grant which offers a one-time £500 payment upon a child’s birth to help with costs4. Universal credit is also available to those who qualify.
Lastly, employees have the option to work for up to 10 days during their maternity leave, through an initiative called ‘keeping in touch days.’
These days of work are paid in full and do not have an impact on maternity leave payments.
Photo by Kristina Paukshtite: https://www.pexels.com/photo/mother-holding-her-baby-3270224/
Diandra Latibeaudiere-Gardner 'Finance Dee' is a 28-year old British-Jamaican living in the SE of England. By day she's a research consultant and by night a finance YouTuber and FIRE blogger