Pregnant, Self employed & tax credits - can I claim Maternity Allowance?

alanamyles

I'm in a bit of a panic here and am hoping someone can advise me.

Back in January I stopped receiving IS to set up my own business and become self-employed. I don't earn much yet, and receive TC and CTC as I have two children (14 and 6). I've recently found out that I'm pregnant, due in October, and unfortunately daddy didn't stick around.

I've already been quite poorly with this pregnancy and am anxious about complications as I reach full term which would make it very difficult for me to continue working.

A friend suggested I apply for Maternity allowance when I'm around 7 months pregnant, but as I'm self-employed and on a low income I'm not sure I'll be eligible.

My business means the world to me and I really REALLY don't want to have to go back to claiming Income Support or close my business down. Can anyone advise me if I'll be eligible to claim any maternity benefits? And if so, would I need to stop claiming Tax Credits (as for a couple of months at least I'd probably not be able to work)?

Are there any "calculators" which take maternity into account which I could use to estimate a potential income?

At the moment, I'm taking on as much work as I possibly can in attempts to try and save a bit of money before things get tough so I can afford everything we'll need for baby and to prepare for a drop in income if I do have to revert back to claiming IS, but even this is taking its toll on my health and I'm very anxious not knowing the best course of action here.

Any advice would be much appreciated, thank you to anyone who may help =]

karenx

How much are you earning? If you qualify you will get £124.88 a week or 90% of your average earnings. Whichever is the smallest. So if you earn £30per week you would get 90% of £30 which is £27. For a maximum of 39 weeks.

Becles

Do you have a Small Earnings Exemption Certificate?

If you do, you'll get £27 a week in MA.

If you don't have the certificate and are paying Class 2 NI, you will automatically get the top rate of MA (£124.88 a week) regardless of your actual earnings.

As you are still technically working while claiming MA, you tax credits should continue as normal.

Jowo_2

Keep your eye on how the implementation of the Universal Credit system will affect the self employed on low incomes.

The proposal paper, although just high level, indicates that the SE will be treated as if they earn the National Minimum Wage for the hours they work. To me, this indicates that those with no or low profits will not get the same degree of means tested top-ups that they enjoy now, because they will be treated as if they have a notional income of the NMW whether they achieve it or not.

alanamyles

Becles wrote: »

Do you have a Small Earnings Exemption Certificate?

If you do, you'll get £27 a week in MA.

If you don't have the certificate and are paying Class 2 NI, you will automatically get the top rate of MA (£124.88 a week) regardless of your actual earnings.

As you are still technically working while claiming MA, you tax credits should continue as normal.

Thank you for this, wondering if I'd still qualify for TCs was my biggest concern.

No, I don't have a small earnings exemption certificate. TBH I don't know anything about this at all - perhaps it's something I should get advice about?

I'm averaging about £70/week at the moment (and am hoping the extra work will bring me up to about £90/week shortly). I don't pay NI contributions at the moment as my low earnings make it optional rather than compulsory (as advised by the jobcentre when I opted to go self-employed).

Would you be able to advise roughly when I should apply? From what I can tell, Maternity allowance can be paid no sooner than 11 weeks before my due date, so I'm wondering if it's worth applying just before this and hope any allowance payments I'm eligible for could start pretty much as soon as I need to stop working.

Also, if it turns out I'm ineligible for maternity allowance, would my TCs still get paid? Just before and after having the baby I'm sure it will be nigh on impossible to work, and as WTC is only paid when the claimant works x-hours per week, I can't help but worry I'll be ineligible during this time.

Thank you both so far for your advice, I'm very grateful and certainly more hopeful than I was before today!

Becles

Definitely don't get the small earnings certificate. As you are not paying NI in another job, it would be prudent to pay the Class 2 NI.

I'm on monthly direct debit and it's about £10 a month, so not a huge sum to have to pay out, but it entitles you to Maternity Allowance, and other things like ESA, should you fall ill or have an accident and so on.

Look on the HMRC wesbite and give the self employed helpline a ring. I can't remember if you need 13 or 26 weeks of Class 2 NI contributions, but hopefully you'll have enough time to get enough contributions made to entitle you to the full MA.

I claimed full MA for the 39 weeks and my child tax credits were unaffected during that time. I think WTC is the same. They would only stop if you took extended leave after 39 weeks as you are choosing not to return to work if that makes sense.

alanamyles

Becles wrote: »

Definitely don't get the small earnings certificate. As you are not paying NI in another job, it would be prudent to pay the Class 2 NI.

I'm on monthly direct debit and it's about £10 a month, so not a huge sum to have to pay out, but it entitles you to Maternity Allowance, and other things like ESA, should you fall ill or have an accident and so on.

Thank you SO MUCH Becles, this is wonderful advice. Everything is a little confusing right now, and I would definitely feel better making NI contributions while self-employed if this could help with potential problems in the future.

I'll take a look at the HMRC website now =]

Charlie1978

I've just had to do this myself. I was advised by HMRC to just pay up my NI Contributions (Class 2) as i'm Self Employed too yet was entitled to an exemption certificate. So instead of claiming my exemption certificate (I had to do my taxes in January) I simply paid £200 (for the whole year and a half) and have been advised i'm now entitled to the maximum of £124.88 a week.

There is a test period though that you'll need to be made aware of. I got the editable PDF off the HMRC website which allowed me to type my details in to be printed off later to take to the Job centre. In it it says:

you have been employed or self-employed for at least 26weeks in the 66 weeks before the week you expect to have your baby, The 66 weeks before the week you expect to have your baby is known as your Test Period.We work out your test period from the date your baby is due, not the actual date of birth.We count employment for part of a week as employment for a whole week.

It does give you the test period on the PDF too so you can work out the dates and stuff and when is best to apply.

Hope it helps.

alanamyles

Thanks Charlie1978, I think I'll be doing pretty much the same.

I called HMRC a little while ago to sort everything out; the (wonderfully helpful) lady I spoke to advised me that my income is low enough to request a small earnings certificate BUT I asked if I could pay voluntarily and she's sending out the DD form for me.

As I've not already been paying NI contributions, I need to pay a lump sum in August (in plenty of time before bumps due to emerge) and should have been paying for a period of about 36 weeks by my due date which I hope will cover the 26 out of 66 week period.

Although I'm earning only earning about £90 a week (topped up with WTC and CTC) will I be eligible for the full £128.44 because I'll have paid my NI contributions, or will this be 90% of my average earnings? Even £81 a week is more than I was expecting, so I'm not complaining by any means =]

Thank you all so much for your wonderful advice!

Becles

The 90% of earnings rule is for employed ladies who can't claim SMP.

As you are self employed you either get £124.88 or £27 depending on your circumstances.

Hope everything goes well for you xx

Charlie1978

Yes. So if you pay all of your NI Class 2 contributions you are automatically entitled to the £124.88 a week for 39 weeks.

It's a no brainer really as I paid £200 which I will get back within 2 weeks of maternity leave money.