Freelance & Self Employed Maternity Pay

Under current rules, self-employed workers do not have as many maternity rights or entitlements as employed workers. However, if you work as a freelancer and on a self-employed basis, you may be entitled to a specific type of maternity pay called maternity allowance.

 

Statutory Maternity Pay or Maternity Allowance?

 

Statutory Maternity Pay (SMP) is a benefit for women who are employed.

Self-employed women, who are also employed part-time, may be entitled to receive SMP from their employer.

If you are a self-employed sole trader, you would not be eligible to claim SMP, however, you may qualify instead for Maternity Allowance (MA).

If you qualify for SMP, you will not receive MA, even if you are working for yourself at the same time as being employed or helping a self-employed partner or spouse.

Maternity Allowance (MA) is a weekly benefit payment for women who do not qualify for SMP.

To quality for MA, you must have been employed or self-employed for part of the time during and before you became pregnant and your earnings for part of that time were at least £30 a week.

 

Employment status

 

To understand your maternity entitlements, you will need to confirm your employment status.

If you invoice for work done and pay your own tax and national insurance contributions through a self-assessment tax return, you are usually considered to be self-employed or a freelancer.

If you are considered self-employed or are an independent contractor but have worked for the same employer for a continuous period of time, depending on the facts of your working arrangement and relationship, you may be able to establish that you are an employee or a worker, for example, if you followed their rules on timekeeping, or worn a uniform. You would therefore be entitled to things such as sick pay, holiday pay and Statutory Maternity Pay (SMP). If you think you have been incorrectly classed as self-employed, you should seek specialist advice on your employment status.

If you work under a zero-hours contract or via an agency, you are more likely to be considered an employee or worker, and therefore have more rights during pregnancy and maternity leave.

If you have set up your own business and are paid a salary, either as a director taking dividends, or an employee with Class 1 National Insurance contributions deducted at source, you may be eligible to be paid SMP, provided you meet the SMP qualifying conditions. SMP is then reclaimed by the company from HMRC.

If you do not meet the qualifying conditions for SMP, you should claim Maternity Allowance.

 

Maternity Allowance freelancer eligibility

 

Whether you are eligible for MA will depend upon the work you have done during what is called your “test period.” The test period is 66 weeks before the baby’s due date and you must have been employed and/or self-employed for at least 26 weeks of the test period.

If you have done any work for which you have been paid during a week in your test period, it counts as one full week, even if you only worked for one day of that week.

Additionally, the weeks during the test period do not need to have been consecutive, for example, you may have worked Tuesday and Wednesday one week, and then a Friday two weeks later, this would still count as two weeks. At least 13 of your “weekly” earnings must be £30 or over in order to qualify for MA payments.

 

How much is Maternity Allowance?

 

Whether you qualify for MA and how much you are likely to receive depends on meeting certain eligibility criteria.

The amount you will get depends on your Class 2 National Insurance (NI) contributions, which are generally made automatically when you submit your self-assessment tax return.

If Class 2 NI contributions are made through your self-assessment tax return (and providing you meet the 13-week qualification during the test period), you will typically be entitled to £151.97 (April 2021 – April 2022 figures) per week for up to 39 weeks.

If you earned, on average, less than £151.97 per week during your test period, you would receive 90% of your average pre-tax (gross) earnings instead of the higher figure. You can calculate the average by adding your gross total earnings for the 13 eligible weeks of your test period and dividing the sum by 13.

If you have not made sufficient Class 2 NI contributions to get the full rate of £151.97, you may qualify for a reduced sum of £27 per week for 39 weeks, providing you meet the other criteria. If you can make early or additional NI contributions, you may be able to qualify for the full rate of MA and should speak to HMRC who can help you do this.

If you are doing unpaid work for your self-employed partner or spouse, you may be able to get MA for 14 weeks. You will need to have been working for their business for at least 26 weeks of your test period, with your partner or spouse making Class 2 NI contributions.

You do not have to pay tax on MA.

 

How to claim Maternity Allowance

 

You must be at least 26 weeks pregnant to claim MA and complete the government’s Maternity Allowance claim form (MAT1).

Once completed, you must send it by post to the address given on the form. If you have any issues downloading and printing the form, or you do not have the facilities to do so, you can ask JobCentre Plus to post a form to you instead.

If you have not completed 26 weeks of self-employment in the 66-week test period before your baby’s due date, you can send in the claim form once you meet the qualifying criteria. MA can only be backdated for up to three months, so if you make a late claim you may lose some or even all of your MA.

 

When does Maternity Allowance start?

 

You can choose when you want to finish work and start the maternity allowance period, although this cannot be a date after the baby has been born. Your chosen date should be recorded on the MA claim form.

If any of the following circumstances apply, your maternity allowance will start automatically:

• If you give birth before the date you have given to stop work. Here, your MA period will begin the day after the birth. It is probably sensible to contact MA claims and notify them of the situation.
• If you are no longer self-employed or have ceased trading by the 11th week before your baby’s due date (29 weeks pregnant) your MA period will start at that time.

 

Maternity Allowance following stillbirth

 

If your baby is born after the 24th week of pregnancy, and you meet the other qualifying criteria, then you will still be entitled to receive MA.

The end of the 24th week of pregnancy is determined by counting back 16 weeks from the Sunday before your due date. The date that the baby was delivered is considered the date of the stillbirth, even if the baby died earlier in the pregnancy.

There is some discretion to pay MA if your baby was stillborn less than a week before the end of the 24th week of pregnancy, so it is worth making a claim and seeking advice if your claim is refused. Your midwife can give you a certificate of stillbirth or registration document to send in with your MA claim.

 

Working during your Maternity Allowance period

 

You can work for up to ten days without losing any MA, and this includes both employed and self-employed work. These are called “Keeping-in-Touch” or “KIT days”.

Working more than ten KIT days can result in the temporary loss of your maternity allowance.

Your Maternity Allowance should not be automatically stopped.

The DWP will use discretion to determine what action should be taken against you if you work for more than ten days, depending for example on how much work you are doing.

A full return to your work and duties could see you being disqualified from receiving further maternity allowance for a reasonable period.

The sort of work that counts as a KIT day includes:

• Any work you do as a KIT day, even if only for half an hour, will count as a complete day for KIT purposes.
• Work that you normally do in the course of your job, including work done from home. It is probably best to do as much work as you can over one day, rather than spread it over several days. That way you don’t use up too many KIT days when you are only doing an hour or two of work.

You should keep a clear record of any KIT days you worked because if you cannot provide such a record, DWP will make an estimate.

The sort of work that is allowed under DWP guidance which does not count towards KIT days includes:

• Carrying out essential administration
• Accepting work which is to start after you return to work and after your MA ends
• Carrying out necessary maintenance to equipment or to a website
• Responding to correspondence requesting information, providing it does not relate to work to be carried out before you return to work and before the end of your MA.
• Keeping formal qualifications and licences up to date.
• Keeping skills at an acceptable level, although this does not include paid-for training.
• Preparing for work before the MA period starts, but which is carried out after you return to work and after the end of your MA.

 

What if I am not eligible for Maternity Allowance?

 

If you are not eligible for MA, you may be able to get another benefit instead. This is usually Employment and Support Allowance (ESA). If you apply for MA and do not qualify, then you will automatically be considered for ESA, and will not have to make a separate claim.

The minimum rate of ESA is £59.20 per week and can be paid from six weeks before your due date and for two weeks after the baby is born. The maternity certificate you are given by your midwife after 20 weeks (MAT B1 form), is enough to prove you cannot work and you will not have to undergo a Work Capability Assessment.

 

Self-employed maternity rights

 

As well as maternity-related pay, self-employed and freelance women may also be eligible for:

• Sure-start maternity grant – if you are expecting your first child you could receive a one-off payment of £500 towards the costs of having a baby.
• Child benefit – once your baby is born, you can claim child benefit. In circumstances where one or more parent earns over £50,000, you will be subject to a higher earner child benefit charge, which reduces the amount of child benefit received.
• Working Tax Credit/Child tax credit – you can only make a claim for child tax credit if you are in receipt of working tax credit. If you cannot apply for child tax credit, you can apply for universal credit instead.
• Universal credit (UC) – if you are applying for UC, you will be asked to show that self-employment is your main employment and you are running a business that is expected to make a profit. The monthly payment you receive fluctuates and is calculated by comparing actual earnings with the amount you are expected to earn, this is called “the minimum income floor”. However, this does not apply if you are pregnant, have had a baby in the last 15 weeks or if you are caring for a child under 3.