SMP as a lump sum & redundancy

[ladymia]

Hi

I have some questions regarding this if anyone can help :)

My last day at work is 31st of December, at which point my role will be redundant. I was given notice of this in July (2 days before i found out i am pregnant!) Anyways, I still qualify for SMP.

My questions

Do I get the company's maternity pay as per my contract? Or SML?

Will I be paying a lot more tax if this gets paid in a lump sum? They have said they will allow this to be paid in a lump sum should that be what i prefer (which it is)

Do you acrue holiday days while on Maternity leave given the above? I would say no but someone insisted that I would be entitled do the holiday days I would have accrued?

Thanks!

[Ellypoo]

Hi
Congratulations on your pregnancy, and I'm sorry about your redundancy.

I'm not sure about the company's maternity pay if you've been made redundant, I suspect that you won't get that but will still be entitled to SMP, but I would have thought that this would be either stated within your contract/company policy, and also could be negotiated as part of your redundancy settlement.

In terms of being paid in a lump sum rather than monthly, SMP is subject to tax & NI, and as your maternity leave would be split over 2 tax years, it would mean that your tax free allowance would be spread and so you would get the benefit of it throughout your maternity leave period. In a lump sum, you would be taxed on it all in one go, so you will be paying a lot more tax than you probably would do if it was spread over the 2 tax years. Also, if you don't go back to work before April 2014, then you stand to lose your whole tax free allowance from the 2013/14 tax year, which is something to think about. For this reason, I would say that it was preferable to be paid your SMP monthly to ensure that you get the best benefit from the tax allowances.

You do accrue annual leave during maternity leave, however I have no idea if you would still if you had been made redundant prior to your maternity leave starting - perhaps there will be someone else along who knows about this, but as you aren't still employed, I wouldn't have thought that you could accrue leave.

[flowery]

Re company maternity pay, no one on here can tell you that, as the company gets to set terms and conditions on that. Usually not, because you won't still be employed, but they may make an exception as you are leave employment through no choice of your own. You will need to ask them.

Tax - see Ellypoo's answer.

Holiday - you do accrue holiday throughout maternity leave while you are in employment, but you can't accrue holiday if you are not employed, so you will accrue it up to and including 31 December.

[ladymia]

thanks ellypoo and flowery.

the company's policy is not that different to SMP. it's 6 weeks at 100% compared to 6 weeks at 90% so not really something that is bothering me but was just interested.

I think I need to phone HMRC to check out the tax complications. to be honest I would prefer to make a clear break and will take a tax knock if it's not huge.

We had saved for me to take a year off so there is no chance of me going back to work before that, so not concerned about that.