To recommend all sahms who might have another baby register as self employed...

[sillyoldfool]

...and pay their class 2 national insurance contributions?

If you register, and pay your NI you're entitled to the full amount of maternity allowance (£137 a week for 9 months) it doesn't matter how much, if anything, you earn. The NI contributions are less than £2 a week. If you pay them for 2 years you'll get the full amount back within a couple of weeks of MA.
So register, sell a couple of bits on test or similar, do a tax return once a year (very simple if you're not earning much) and then claim MA.

But many self employed women I know could also get by easily without the income.
One of the partners at dH's work live close to us and we see them semi regularly. His wife is registered self employed as she makes greetings cards. A tiny amount for a tiny income. She does it because all four of their kids are now at school and as her DH earns in excess of 200kpa, she doesn't need or want to return to work.

So how is it morally ok for her to claim as she is indeed SE, but not a sahm who is finding things tight but can't return to work as childcare would take up all her wages? I'm not looking to claim myself but I just don't think it's in the realms of fat cat tax evasion especially for women who have paid NI for many years before giving up work.

When I had dc3 in 2010, I had been self employed (childminding) since having dc2 in 2008. I was earning about £40 per week, term time only and got full MA for 9 months as I had paid my ni contributions for the required number of weeks. I guess you can be self employed and your business not have many clients?

I think I agree with you skye (I'm SE myself).

It's one thing to say: hey ladies, why not start your own business and register as SE, one of the side benefits is you can get MA.

It's another to basically be all, hey sign up as SE, they don't even check to see if you do anything! Free money waheyyy!!

The changes to SE that are coming in under UC are awful, and largely the result of people exploiting SE loopholes for so long.

I don't know why people keep saying this isn't true - it is and I've done it twice now (legally and truly self employed). They do not check your earnings. If you are registered self employed and have paid class 2 NICs then you are entitled to full MA. My last mat pay ended in August so very recent. As some PPs have said, this may raise ethical questions however I'm inclined to agree with those posters who say yes but what about those SAHM who have worked for many years, paid into the system and receive no maternity benefits. It doesn't seem right. Ok it's a loophole but maybe it could be a good incentive for some SAHM to start their own business/ get back into work?

The whole point of SMP/MA is to replace lost earnings for people who work! If you don't work you haven't lost anything. It's a simple fact of entitlement.... It is a benefit for people who work not those who don't work. Doesn't matter what you used to do, if you don't work now then you are not entitled to it.

Why should a SAHM commit fraud? Because that's what it is if you are not genuinely self employed.

I think some posters are missing that you have to tell hmrc you are self employed when you aren't.

you don't quality because you have paid class 2 contributions. you quality because you have paid class 2 contributions and you claim to be SE.

if they don't check, you get away with it.

hopefully this will be tightened up in the same manner as the UC SE changes.

mind you - should we all do everything we can get away with to reduce our taxes/receive benefits?

It's true, I've done it with my etsy shop.

Yes, pay N.I. class 2 always, regardless of income and you will be given full MA.

I did this a couple of years ago with dd. I was contracting freelance at the time, but very few hours. Do not apply for the small earnings exemption and just opt to pay the class 2 rates - about £12 month back then.

We have no plans for another baby soon/ if ever bt is it a good idea for me to register as SE and pay NI contributions whilst I'm a SAHM?

For pension purposes I mean.

I really tried to keep out of it but the thread keeps popping up in active convos. You are looking at the wrong thing - MA entitlement is as mentioned above. It's the requirement to pay class 2 NI where SAHMs would fail. They are not self-employed and therefore should not be paying class 2 NICs (see here: www.hmrc.gov.uk/manuals/nimmanual/NIM20100.htm)

People who are genuinely self-employed are supposed to get MA, even if their earnings are low. People who are not self-employed but register as one to pay class 2 NICs and then claim MA are acting illegally.

so some posters have got away with it.... but its illegal?

I'm not sure whether they have 'got away with it'. Several of them have confirmed that they were freelance but not earning much during their pregnancy and got the full MA. That is fine since they were still self-employed. But a SAHM at home wit children doing nothing to earn any money is not self-employed and therefore should not be paying class 2 NICs.

Word of warning to those considering this. What the OP is suggesting constitutes fraud. Am sure I don't need to spell out the consequences if you are caught commiting fraud.

It's fine if you are genuinely SE. But don't think it's good to do if you're a sahm. Maybe they'll start checking.

I got MA for my second child as a SAHM without having to be SE...........

just took Maternity leave for my first child, went back for the minimum time required to keep the enhanced money, (one month - but had saved annual leave before ML started so went back physically for half a day) then left and got pregnant again....

so because I had paid NI in the previous 66 weeks, I qualified... you plan for your own advantage... no laws broken...

You were employed Made?

I think it's an excellent thing to encourage women to remain in the workforce and earn their own money.

It's a terrible thing to encourage people to play the system. Fraudsters may or may not get into hot water themselves, but many honest people will be subjected to all kinds of extra scrutiny, the stress of which may cause them to give up their business.

I can't honestly tell which of these two the OP is doing, but we should give her the benefit of the doubt and assume (or pretend) it was the first, yes?

I don't think it was the first unfortunately, just saying do commit fraud.

But yep perhaps some people will start a business legitimately and that's fine.

Marsha.. I was employed for the period up until I left after maternity leave for my first child....

I was not employed for the year before the birth of my second child... they were born 18months apart, so the timing meant I qualified for MA for my second child as a result of my previous employment....

I think it's entirely possible that if you do this, a year from now you might get a letter like this:

Dear XXX,

As part of our ongoing effort to eliminate fraud in the self-employment sphere, we are reviewing claims to MA made by self-employed individuals in the last two years. We ask you to please send us proof of your self-employment income in the form of accounting statements, invoices, bank statements, etc. If we determine that you were not genuinely self-employed, or genuinely seeking income on a self-employed basis, you may be required to return all funds received.

Madeofstardust that's my situation also. Currently I could use my maternity leave employment to apply for MA if I'm lucky enough to fall pregnant in the next few months.

That sounds fine to me. I haven't been employed for a long time and have never had ML paid for by an employer. So not really sure at all on timings. I've only been SE.

But if you're not doing as the op suggests, ie a sahm registering as SE then sounds fine.

I used my maternity pay and a month of salary to get MA when I had my second child too.