Statutory Maternity Pay, or Maternity Allowance?

[Deleted User]

Here's a pickle that I just can't seem to find a straight answer to, but maybe someone here knows...

Mrs B is due to give birth in about 8 weeks.

She works a couple of days a week - her pre-tax earnings are enough to qualify her for SMP... but she is a member of the company's pension scheme. It's not a salary-sacrifice scheme, but she pays her 3% contribution out of her wage each month.

The amount she actually takes home (she doesn't pay any tax or NI) is BELOW the SMP limit, so would qualify her for MA instead.

But the question is this - when calculating the relevant "income level", is it before that pension contribution, or after?

[Deleted User]

So, if her payslip says this:

Salary: £485
Total Gross: £485
Minus Pension: -£15
Taxable Pay: £470

Then her entitlement is calculated on the higher, £485 figure, making her eligible for SMP, right? Even though the part paid to the pension isn't taxable?

chrisbur

I think that it would be safer to check the actual details here, you say "Mrs B is due to give birth in about 8 weeks" which is a little vague, but it suggests that there is a small possibility that it could take the qualifying week back to the old tax year. Have your wife's earnings been the same back to say January if so no problem but if there has been any reduction would be best to check actual dates.? The actual qualifying week will have been decided on by reference to the date given on the MatB1. Do you know the qualifying week if not the date of expected birth from the MatB1? This Qualifying week will decide which months' earnings will be used to check entitlement.

[Deleted User]

chrisbur wrote: »

it suggests that there is a small possibility that it could take the qualifying week back to the old tax year. Have your wife's earnings been the same back to say January if so no problem but if there has been any reduction would be best to check actual dates.?

Theyve been the same earnings every month for the last 2 years, with the same pension deductions too.

So, she should be safe for SMP?

chrisbur

billbennett wrote: »

Theyve been the same earnings every month for the last 2 years, with the same pension deductions too.

So, she should be safe for SMP?

Should be no problem then. The employer should confirm details in writing.

"Statutory Maternity Pay (SMP)
Employees must give you 28 days’ notice. You have 7 days to write confirming:

they’re eligible for SMP
how much they’ll get
when the pay will start and stop"