In this article looking at how much maternity pay you can get we will focus on statutory maternity pay while also appreciating there are other payment paths available. It is obviously very important to plan ahead with regards to your pregnancy and income during your maternity leave. The last thing you want is additional financial pressure as you approach your due date.
The rules and regulations regarding statutory maternity pay are relatively straightforward, although in some cases it may be sensible to take advice.
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Different types of maternity pay
There are three basic types of maternity pay, two of which are relatively well known, while the other is maybe a surprise to some people. The three basic types include:-
- Statutory maternity pay
- Contractual maternity pay
- Maternity allowance
Your contractual maternity pay will be detailed in your employment contract or a separate maternity policy document produced by your employer. Maternity allowance is paid by the UK government with further details on the Gov.UK website. Statutory maternity pay is covered below.
What is the standard rate of statutory maternity pay?
The maximum rate of statutory maternity pay is fixed, but depending upon your income you may receive less. Standard statutory maternity pay will be paid for a maximum 39 weeks which is split into two different periods:-
- Six weeks maternity pay based on 90% of your average weekly pay (before tax)
- 33 weeks on the lesser of 90% of your average weekly pay (before tax) or £194.32 a week
There are a number of factors to take into consideration when calculating your average weekly pay (before tax):-
- You will still be liable for income tax and national insurance on your statutory maternity pay
- The average pay calculation will include any sick pay, back pay, holiday pay, bonuses and maternity pay from a previous pregnancy
As a side-note, the level of statutory maternity pay is the same whether you are pregnant with one or more babies.
Examples of statutory maternity pay calculations
It is fine to list the terms and conditions of statutory maternity pay but what do they mean in real life? In order to clarify the situation, we have listed two examples below:-
- Average weekly income: £500
In this scenario, for the first six weeks you would receive 90% of your gross pay, which equates to £450. As your average weekly pay is over the statutory maternity pay level of £194.32, you will receive £194.32 per week for the next 33 weeks.
Six weeks at: £450 a week
33 weeks at: £194.32 a week
- Average weekly income: £129
We have chosen the level of £129 a week because this is the minimum average pay which will entitle you to statutory maternity pay. In this scenario you would receive 90% of your average weekly wage, in this instance £116.10 a week, for the full 39 weeks. This is because 90% of your average weekly pay is lower than the standard statutory maternity pay of £194.32.
Six weeks at: £116.10 a week
33 weeks at: £116.10 a week
Changes in statutory maternity pay
At this moment in time the standard statutory maternity pay is £194.32 a week. Traditionally this figure will increase by inflation each year but, as we saw in the latest budget, some government allowances can be frozen. If you were in receipt of the maximum statutory maternity pay, and the rate was increased by the government, you would receive the increased payment from the date of change.
When does your statutory maternity pay start and finish?
It is important to realise that your start and finish dates with regard to maternity pay can vary depending on your situation. There are numerous issues to take into consideration such as:-
- Your statutory maternity pay cannot begin while you are still working
- Only in exceptional circumstances would your statutory maternity pay begin more than 11 weeks before your due date
- If you experience pregnancy related illness in the four weeks before your baby’s due date, your statutory maternity pay would be brought forward
If you are not eligible for maternity leave then your statutory maternity pay (assuming you are eligible) would begin the day after your baby is born. Irrelevant of the start date for your statutory maternity pay, it will last a maximum of 39 weeks unless you choose to return to work early.
Maximising your average weekly wage
Your average weekly wage is very important when it comes to the calculation of statutory maternity pay. It is therefore in your best interests to maximise your average weekly wage in the run up to your maternity leave. The calculation is based upon your average weekly gross income in the eight week period prior to the 15th week before your due date. Obviously, your health and that of your unborn child must come first, but there may be occasions where you can maximise your income by:-
- Cancelling unpaid leave
- Taking on additional shifts/extra work
- Considering taking holidays instead of sick days, if this is beneficial for your average wage calculation
These are all perfectly bona fide strategies to maximise your average weekly pay, which will have an impact on how much maternity pay you’ll receive. On the other hand, we have seen occasions where employers have attempted to:-
- Reduce hours
- Delay pay increases/bonuses
If your employer reduces your hours, delays pay or makes changes to your employment contract to alter your working hours because you are pregnant or to reduce your maternity pay, this could amount to pregnancy or maternity discrimination.
Options to increase your income
Under normal circumstances, a return to work or move to a new job would automatically end statutory maternity payments. However, there are some scenarios where it may be possible to receive statutory maternity pay and a “little extra” from your employer:-
Keeping in touch days
There are some roles where you may be called upon for advice with particular clients, projects, etc. Therefore the regulations permit you to arrange a maximum 10 “keeping in touch days” while you are on maternity leave. In effect, these are additional working days which your employer would pay you for, on top of your statutory maternity pay. Depending on your normal working pattern and what is agreed, 10 keeping in touch days could provide a useful amount of additional income.
If, while on maternity leave, you worked more than 10 additional days for your employer, you would lose one weeks maternity pay for each week in which additional days were logged. Under current regulations, these additional days are only allowed to begin at least two weeks after your baby is born (four weeks if you work in a factory). While some employers may welcome these additional “keeping in touch days”, they are optional and your employer is not legally obliged to agree to any requests.
Working for another employer
This area is a little more complicated and is often covered within your employment contract. In theory, there is nothing stopping you working for another employer during your maternity leave. However, some employment contracts may oblige you to seek permission from your current employer. Check your contract.
Once your statutory maternity payments have begun from your first employer, you can carry out work for another employer prior to the birth of your child. For many people there will be medical issues to consider but, assuming full health, there is nothing stopping you seeking additional employment opportunities. The situation is a little more complicated once your child has been born:-
- Under normal circumstances, once your child has been born and you go back to work your statutory maternity pay will end
However, it will continue if you fulfil the following two conditions:-
- You had already completed work for the second employer in the 15th week before your due date
- You are not entitled to statutory maternity pay from your second employer, whether earning under the £129 a week minimum or having worked for them for less than 26 weeks
As you can see, when you dig a little deeper below the surface, things do become a little more complicated.
Self-employed work
You are perfectly entitled to carry out self-employed work during your maternity leave and when in receipt of statutory maternity pay. The situation is a little different when it comes to contractual maternity pay. In many cases your employer will request that you obtain permission to carry out additional work. There may also be other terms and conditions regarding contractual maternity pay which could affect your income while on maternity leave.
Even if your employer does not provide contractual maternity pay, they may still ask that you obtain permission to undertake additional work while on leave. Failure to abide by your employment contract could prove expensive and potentially put your employment at risk. On the other hand, your employer can’t stop or reduce your statutory maternity pay once it has begun.
Maximising how much maternity pay you can get
It is important to be aware of your rights and obligations when it comes to maternity pay and maternity leave. As demonstrated above, there are ways and means in which you can maximise your average weekly income as you approach the cut-off point at which your average weekly wage would be calculated. These options must obviously be considered in tandem with any health issues and potential dangers to your unborn child.
The basic rules and regulations regarding statutory maternity pay are fairly straightforward. Thankfully, the government has also introduced an array of options for those facing extenuating circumstances. To ensure that you are maximising how much maternity pay you get it is advisable to seek professional guidance.