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Are you self-employed? (maternity allowance)

(46 Posts)
Snowlet Tue 21-Jan-14 08:56:51

I've learned something quite crucial, and thought I should share it

I'm self-employed, and don't make very much. I held a 'small earnings exception certificate' until a few months ago. I also voluntarily pay Class 2 national insurance and always have, even though I'm not required to.

However, even if you're paying your full Class 2, if you have a 'small earnings exception certificate', you are NOT ENTITLED TO FULL MATERNITY ALLOWANCE.

There is time to correct this if you're not very far along, as you need to pay Class 2 (without the certificate) for 15 weeks to qualify for full maternity allowance. But I could see this completely buggering up some people's plans if they don't realise they're not okay, even though they're paying Class 2. It's the difference between £30 a week and £140 a week (roughly) so, real money.

I hope maybe this helps someone. I find it bonkers.

kicksandgiggles Tue 21-Jan-14 10:57:50

Thanks, Snowlet. This is really good to know. I used to have a small earnings exception certificate, and probably would have qualified again, but suspected it would affect MA, so went ahead and paid it. Really glad I did!

CrispyFB Tue 21-Jan-14 11:17:47

Yes, it is absolutely 100% true and it caught me out last pregnancy. It was a bloody nightmare as I only found out after I applied at 26 weeks when I still had the blasted certificate and had done since I'd started my business.

It's not at all clear ANYWHERE that this will happen, even when you apply for the SEC which at best mentions pension benefits etc which you assume will be okay as you get NI covered for pensions purposes when claiming child benefit or something along those lines. There was no mention of the major impact of Maternity Allowance which surely, surely is going to affect a sizeable portion if not the majority of people applying for a SEC. e.g. SAHMs starting a small, part time business as so many of us do to keep brains active and earn some extra cash, and then go on to have another child.

Fortunately I'd only started the business officially 10 months or so earlier, and HMRC allow you to shift the start date by a certain amount, so I moved the start date to 3 months earlier. I had no SEC to cover those new dates of course, so I dutifully paid my few quid a week to cover that period and they were happy and I had my required 13 weeks of non SEC time. It felt a bit like cheating, but on the other hand, I felt like they'd cheated me in the first place by complete lack of information. I even spoke to somebody when I applied for the SEC and although pensions were discussed, there was no mention of the affect on MA - I knew we'd be TTC in the near future so there was no way I'd have done it if I'd known. It's not even very clear on the MA application form either, although I think a bit more is said than there was a few years back.

Very frustrating and stressful though! Glad you spotted it in time.

Snowlet Tue 21-Jan-14 11:23:59

Ah, is it 13 weeks Crispy, not 15? That's good as well, my mistake.

But yes, it's exactly as you say, it's hidden and unclear and pretty anti-woman too, in my personal opinion. I didn't find the current applications or guidance notes to be any more clear, I found out via forums like this one! I'm very grateful for the internet and the way it allows mums (to be) to talk directly to each other.

Semi-related question-do you carry on paying class 2 while on mat leave? It would seem illogical but when I was employed and on mat leave I think I did pay nat ins...or am I imagining that?

CrispyFB Tue 21-Jan-14 12:56:26

It was 13 weeks back in 2011 - I don't think it's changed now (just applied for mine again last month but with no SEC to worry about this time I didn't look too closely!)

Yes, it is anti-woman, I agree, and I thought that at the time too. Men can have SECs for as long as they want and it'll never affect anything they're realistically entitled to. Women have to hold off in case they have another baby.. AND be aware of the fact they need to as well. Which is even harder.

It's such a little known thing with such a big financial impact!

AntoinetteCosway - Fairly sure you don't need to from memory. Wouldn't bet my life on it though! If you pay by six monthly payments then give them a call when the next one comes through and check.

lucyfluff Tue 21-Jan-14 13:22:52

Oh thanks for this information...I have just begun SE and didnt spot that either. Just a quick q....should I pay Class 2 despite only earning about 30 per week atm??

Snowlet Tue 21-Jan-14 13:30:57

lucyfluff you definitely should if you plan to try to claim maternity allowance. As I understand it, it doesn't matter how much you make, just that you are registered with HMRC as self-employed. But someone might correct me on this?

CrispyFB Tue 21-Jan-14 14:17:37

Yep, you can earn as little or as much as you like when self-employed. So long as you don't have that stupid certificate, you'll get the same amount of MA (currently around £138/weekly) no matter what you've earned.

It's very confusing because the website and even their own calculator goes on about choosing your best weeks for earnings etc etc but I think that is more to do with people who were employed and then are not, as opposed to people who are solely self-employed. There's not much mention of purely self-employed people.

It is SO badly and vaguely worded, the lot of it.

lucyfluff Tue 21-Jan-14 16:40:46

Oh ok so could you lovely helpful ladies tell me if I qualify?? Started last week...baby due in Aug.

From what I read I THOUGHT you had to earn a min of 40 per week and when I did the calculator it only gave just above that for MA...confused now!!!

Will def still pay the class 2 rates smile

Thanks Crispy, will do.

CrispyFB Tue 21-Jan-14 18:16:51

This is a really good link here: businessplusbaby.com/2010/09/08/self-employed-protect-your-right-to-maternity-allowance/

lucyfluff - If you've worked 26 weeks out of the last 66 weeks you will qualify for the full amount, so long as you don't have the stupid small earnings certificate when it is drastically reduced. You need to have at least 13 weeks uncovered by that stupid certificate. I think that there are more than 26 weeks left until your due date since last week?

Not sure what happens if baby comes early though, I seem to recall somebody was being arsey about that with me last time at Jobcentre Plus when I was trying to scrape together weeks without a certificate from somewhere. As I was at high risk of PTL it was the last thing I needed to worry about too!!

But yes, you could theoretically do nothing at all, just pay your class 2 contributions (although you'd then technically be committing fraud with HMRC if you said you were self employed when you were actually doing nothing) First time I claimed it, I had actually made a large loss that year as it was my first year in business and I had a LOT of initial outlay due to the nature of the business, but they really don't care what your income was. This last year at least I have been profitable grin

lucyfluff Tue 21-Jan-14 18:27:52

Thankyou crispy for your reply!

Yes I have prob got around 26/28 weeks worth of working before I would stop for mat leave so I guess it would still be ok?! I registered last week with HMRC but yet to recieve anything in the post about how to pay NI etc....I also had initial outlay for setting up business last year but I dont think I will backdate it on MA app as Ive got contracts for clients starting dates now smile

So do I apply online for MA or pop to the JC?? sorry you are a font of knowledge!!!!

Snowlet Tue 21-Jan-14 18:49:33

lucy, before you registered self-employed were you employed by an employer? If so, it should be fine, it's just showing that 26 weeks of work. And that you're currently registered as self-employed with HMRC. (Again, as I understand it!) And yes, they don't care at all about your income (thank god, because er, what income in the first year??)

lucyfluff Tue 21-Jan-14 19:00:26

Oh no I wasnt snowlet sad just SAHM....will that affect it???

McBaby Tue 21-Jan-14 19:14:59

You need to print off and send back the NI form they won't send you anything.

Snowlet Tue 21-Jan-14 19:17:19

Ah, lucy, in that case I believe it comes down to how much time you have before you need to claim your maternity allowance. You have to claim not less than 25 weeks along but it must be before (or maybe on?) the day of the baby's birth. And you'd have had to have worked 26 weeks before then. Crispy, can you confirm this?

Perhaps you should give the NI people a ring. I did find the person on the phone to be helpful, even though all of the written information is AWFUL.

lucyfluff Tue 21-Jan-14 20:35:09

I am hoping to work up to two weeks before bubs is due...by then I would have worked at least 26 weeks so could I apply then? I wonder if they would backdate it to cover the period I finished working?

CrispyFB Tue 21-Jan-14 21:02:01

They say 26 weeks before the baby's due date (but again, I have no idea what happens if baby comes at 39 weeks - I have a feeling it may cause an issue) I'm not sure if it's "the week the baby is due" with some mention of Sundays either, so depending on what day of the week your due date is, it could be nearer 27 weeks if that makes sense. It can't start any later than the day the baby is born.

Might well be worth giving them a ring and asking given the tight timescale.

You probably could ring HMRC self-assessment and backdate a week or two quite legitimately to give yourself some breathing space. I vaguely recall I had a legitimate reason in that although I had not yet been paid at the point of my initial self employment date, I had been available for paid work if needs be and had been preparing the business in various ways including spending money.

You apply online, well, you print out the form (don't enter information on the website - save it as a PDF and re-open it and edit it that way, another way they try and wind us up) and then post it to them when you're 26 weeks. Then around two months later <bitter> allegedly 14 working days after they receive it you get a letter back which confirms what you are entitled to, and a form to fill in once you have finished work which you post back to them when you've finished.

The whole thing is just so bizarre anyway. All sorts of odd and frankly quite sick rules about how you're not entitled to anything if the baby does not take a breath after birth but even if baby breathes once (pre 24 weeks) and then passes away you do. How on earth should something like that be taken into account when a loss that late is horrific no matter what and it shouldn't matter? www.hmrc.gov.uk/manuals/spmmanual/spm20745.htm Why couldn't they have had a much less traumatic and far fairer rule of a cut off of 20 weeks or something <sigh>

I think they hate babies, and all those involved with them, I really do. Who makes up these rules? It certainly isn't mothers.

CrispyFB Tue 21-Jan-14 21:04:19

Forgot to add - Yes, they'll backdate it. They have to backdate mine as I posted mine dead on 26 weeks, but at 29 weeks they still hadn't even processed it let alone sent me out the form to ask when I wanted to finish. I said on the initial form in the comments, but they just ignored it, tossers. I'm now 31 weeks and only just got the second form and posted it back, so I suspect I have at least another few weeks before I'll get anything but they will backdate it to 29 weeks.

lucyfluff Tue 21-Jan-14 21:17:34

Thanks crispy, you have been really helpful smile I wouldnt have a clue where to start and would have probably rang them sounding like a right idiot!!!

I hope you get yours sorted soon smile

lucyfluff Tue 21-Jan-14 21:18:31

Ps it was probably a numpty of the male species making up those rules wink

CrispyFB Tue 21-Jan-14 21:32:30

You're welcome! I know far more about this than I should do because it is so stupidly complicated with all its caveats and the online information so woefully inadequate.

Don't be in the slightest bit surprised if you hear one thing one time you call, then you call them back at another point and get COMPLETELY contradictory information. Even some of them don't know their own rules hmm I wish I could say I was joking. It really is pot luck if you get a properly knowledgeable person on the line or not. There are some there who are lovely and genuinely helpful so it's not impossible, but there's plenty who aren't, and I had one who was very rude last time and told me it served me right for not reading the small print (what small print?! that's the point!) on the stupid small earnings certificate.

Thanks, I hope so too! I'm going to give it another week and then hassle them again. Thankfully DH's income is our main source of income, but it would be awful if I was fully dependent on my own income - unable to take on any more work as legally on maternity leave but no income from MA for over a month.

It was almost certainly a man making up the rules, and probably not one with a self-employed partner with children either!

mel0dy Tue 21-Jan-14 23:39:59

Thanks for this thread- very helpful and reassuring.

mel0dy Tue 21-Jan-14 23:40:54

Thanks for this thread- very helpful and reassuring.

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