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.

It is absolutely legal - I did it in 2011 (stay away from the Small Earnings Exemption certificates though.. I didn't and it got messy but resolved in the end!) I was genuinely self employed doing occasional photography work. Similar situation now, only a different line of occasional work and I will be claiming again with this pregnancy too.

And after the MA ends, I fully 100% intend to go back to some form of employment, whether self-employed, or employed part time.

I have to admit I'd probably raise an eyebrow at a SAHM registering as SE with the express intention of claiming this benefit and never earning any money at all, before or after. However there are always loopholes out there for everything and if they weren't doing that, no doubt they'd be doing something else. It's all down to personal ethics.

But it's not a loophole. You're either genuinely self-employed and claiming MA or you register fraudulently in order to claim MA that you are not entitled to. Loophole is unintended but legal result of an error in law. Registering as self-employed with no intention of doing any work (whether to boost your pension entitlement or claim MA) is illegal. Even if HMRC doesn't catch you it's still illegal.

Well I'd like to thank the OP for her post.

I am S/E and have been for 4 years. I have never been sent a bill for class 2 ni for some reason but assumed that I was being credited via the Child benefit I recieve. This is not the case though.

I have spoken to HMRC this morning and they are going to register me for class 2 NI. I have done Tax returns for the last 4 years showing I am S/E so assume that is the proof I need of my S/E status?

And have requested that the maternity allowance forms be sent out. I will recieve a bill for my NI contributions that I can chose to pay from April of this year. I will then be entitled to the full rate of MA for 39 weeks.

I wasn't going to claim the MA and just go straight back to work once baby was here (work from home so could have done evenings etc once DP home) as I wasn't sure I would get anything, and also what I did think I would get I had assumed that as I hadnt paid the class 2's would have been 90% of the £30, ie £27 a week.

So thank you OP. It isn't really a loophole I don't think. There are rules in place and if you meet the rules you qualify for it. Being S/E for 2 years and paying class 2 NI contributions are the qualifying criteria. Luckily for me I am S/E and the NI contributions can be made now I am registered from april so I qualify for the allowance.

It means I can enjoy my baby without having to worry too much about monies now. So thank you OP.

I'm genuinely SE, have been for years, this is DC3 and it's the first time I've really figured this out, I didn't realise what I was entitled to previously, because it's so difficult to figure out.

If it encourages women to set up a little business selling crafty bits or whatever and register legitimately rather than working cash in hand then I think it's great, knowing you can claim MA even if you only earn a very small amount might just be the encouragement someone needs, and in a few years time they may well make enough to pay plenty of income tax which they wouldn't have otherwise done.

I've had a few pm's from people who've been helped by this thread to claim MA they didn't realise they could get, I think that's a good thing.

Can I ask a question?

I work part time in an office job (where I pay tax and NI) but I have also recently registered Self Employed as a partner in DPs business. Can I (or do I need to) start paying NI as part of this business as well?

Is it worth asking the accountant?

PS we are thinking of having another child, so would also be interested if we could claim MA.

Sounds like a change of tune there. This was for sahms wasn't it?

Don't worry, I've found out the answer!

www.dwp.gov.uk/publications/specialist-guides/technical-guidance/ni17a-a-guide-to-maternity/maternity-allowance-ma/

Peppermint If you're paying NI in your employment then you should be entitled to SMP (see here: www.dwp.gov.uk/publications/specialist-guides/technical-guidance/ni17a-a-guide-to-maternity/statutory-maternity-pay-smp/smp-amount). And if you get SMP then you're not entitled to MA.

And encouraging people to commit fraud isn't really the done thing is it.

Like I said OP, if you had started by saying: are you SE? did you know you can get MA? I think no one would have any issue with that.

The tone of your OP is very much hey register as SE and sell a couple pieces of whatever on etsy and you can get all this money because they don't check anything. That's a bit more dodgy.

Peppermint there is some criteria regarding SMP and the time you have been with your employer. It's very easy to find out by googling SMP. As long as you are paying national insurance through your employment you don't need to pay it through your self employment.

Peppermint - taken from the Government website:

To qualify for SMP you must:

earn on average at least £109 a week
give the correct notice
give proof you’re pregnant
have worked for your employer continuously for at least 26 weeks up to the 15th week before the expected week of childbirth - called the ‘qualifying week’

• so as long as you meet that criteria you should get SMP. If you don't then they will give you a form and you can claim MA from the DWP.

As we receive CB does this mean my NI contributions are paid for?

Peanut - your state pension qualification years are counted if you're claiming child benefit. But it doesn't cover entitlement to MA or SMP. These are only paid if you're self-employed / employed.

PeanutPatty your class 2 NI won't be paid via CB, I have just checked this. However you can register and pay yor NI from April of this year (or a qualifying period) and then claim and be awarded the full rate of MA.

It's not a dodge or a fiddle or a loophole. If you pay your class 2 NI you are entitiled to certain benefits. One of these is MA. NI is a pot you pay into. The amount you pay in will depend on your income at that time. I have paid into the pot of NI for lots of years at a pretty good rate, as has my DP. I am now S/E which means I havent been paying in my class 2s (though this was an error with HMRC as I should have been registered when I registered as SE 4 years ago) but I can get those up to date and claim the MA in good faith.

This is not right. Why should you get big handouts from the government when you choose to stay at home and not pay tax?

froubylou - if Peppermint is self-employed then she can pay class 2 NI and get MA. If she is a SAHM then she can't as class 2 NI is only paid by self-employed people and trying to claim MA in this case would be a fiddle.

Frouby there are Late Payment penalties applied in some cases, backdated payment of outstanding NI used to be discounted whcn calculating entitlements. Again I say, do your homework, folks.

According to HMRC I won't have any late payment penalties because A) I have always done my tax return and paid anything due in time and in full and B) Class 2 NI is an optional payment according to who I spoke to if you are S/E. My class 1 and class 3 contributions are 'paid' as I recieve CB for a child under 12.

And to be honest if I did owe them monies I would rather know and get it resolved ASAP. I'm not a tax dodger or a benefit theif or a fraudster. I didn't think I was entitled to anything. It appears I am. I will claim it and I'm sure if I am not entitled to it and I have it all wrong and have been given the wrong information by the NI Adviser I spoke to, and the MA Adviser I spoke to then it won't be paid.

All anyone can do is ask if they are entitled to anything. In my case I am self employed, as is my DP. We don't get anything really. No help when my DP was off sick 2 years ago (another story), no help when I had DD (was S/E then and went back to work after 3 weeks as I couldn't afford to stay at home. But me and DP have always paid our taxes as and when they have been due. The only reason I haven't been paying Class 2s all this time is because HMRC didn't register me for them and I was under the impression that they were paid via the CB I get.

It would be a bit norty if a load of SAHMs decided to register as S/E then pay the £2.70 a week for 2 years then go on to claim MA. But if they are really S/E then they need to be aware of what they ought to be doing to protect any further benefits which also includes their pension and so on.

But to be fair it's not as easy as you think registering as S/E and the paperwork is a bloody PITA.

I guess I just don't really see much difference between someone thinking oooh, I could set up a little business selling trinkets at craft fairs, register it and then get MA further down the line, and someone who already sells little trinkets at craft fairs for some extra cash realising that they could be entitled to MA. They'll both have paid in as much by the time they get the MA.
But I just don't have any problem with people claiming benefits etc, have never done so myself apart from MA and CB, but that's just luck on my part imo.
Everyone has to answer to their own moral compass.

As long as they actually run that business commercially then it's fine. Your OP doesn't say that though. It seems to imply women who stay at home and generate no income can register and claim MA, which is plainly not true.

Loads of businesses run at a loss or only just break even when they start out.

It's perfectly possible to have a 'pay rise' on MA if you're employed too, they actually tell you to pick your highest earning 13 weeks payslips, so you could earn the minimum then take on extra hours for 13 weeks or temp over Xmas or something to make your average over those weeks up to the max MA amount. That's something that HMRC actually recommend!