Work has paid all maternity pay in one lump sum

[Tallandshort]

I wasn't expecting this.

We are on universal credit so this lump sum will mean we have to reapply next month and wait again.

Has anyone else experienced this?

Has my workplace broken any rules by just paying it as a lump sum without telling me they were doing so?!

To avoid drip feeding, I accepted voluntary redundancy so technically am no longer an employee as of December.

Also, how can I check the amount they have paid is correct? I would only be receiving statutory maternity pay but the first time they calculated the amount they were nearly £2000 off! Sneaky isn't a good enough description for them!

@37weekswithno2

This happened to a friend who was returning to the company afterwards. They paid the whole lot in a lump sum in March, so she had to pay a lot of extra tax compared to if she had received it monthly over the next 9 months.

Tax is based on a yearly basis so she shouldn't have had to pay extra. If she was put onto the wrong tax code she could just phone Hmrc and they would adjust it and pay her back anything she's owed.

Although op I do wonder why you took voluntary redundancy too if you weren't benefitting from it.

The end of the tax year is 5th April, if she was paid a lump sum in March, with regular salary for that tax year (April to March year A) then it is highly likely that more tax would have been paid than if it was paid in April, with minimal income for the remainder of that tax year, year B.

Thanks @dagnabit. I did try at the time to claim it back, but the Student Loan Company were horrendous. I was dealing with the aftermath of a pretty gruelling HG pregnancy and life with a newborn and I just ran out of fight.

I probably have around 5 years left to pay it off, so now looking at it is getting the total down quicker. I certainly needed that money back in 2017 though!

No idea if this could work (may be too late), but in the light of the new furlough scheme, could you go back to your HR dept and ask if it would have benefited them to furlough you till your mat leave starts?

But this isn't maternity pay - it's a redundancy payment. This is almost always paid as a lump sum. Just be glad it wasn't paid just before the end of the tax year (like mine was).

In a redundancy situation i have paid SMP as normal via payroll to last date of employment then paid the rest as a lump sum in final wages.
You should eventually get a tax refund.

maternityaction.org.uk/advice/redundancy-during-pregnancy-and-maternity-leave/

I don’t think they had a choice - if you are off the payroll, you are off the payroll. Everything they owe you gets paid before. There is no other option. I’m confused why you would expect to be paid monthly or weekly if you are no longer employed?

@Jaxhog

But this isn't maternity pay - it's a redundancy payment. This is almost always paid as a lump sum. Just be glad it wasn't paid just before the end of the tax year (like mine was).

but it's not is it - it's mat pay - she hasn't got her redundancy pay yet - and when she does its 1.5 x her weekly wage so prob not very much!

Yes they can (and should if you're being made redundant), but I'm surprised they didn't pay it with your final pay in December, which includes your redundancy pay.

For calculations you can google Money Advice Service maternity pay calculator. They’ve got loads of other good stuff. Pregnant then Screwed have an advice line run by lawyers so I’d give them a call.

It doesn't make sense. A lump pay out of maternity would only make sense if you were no longer on the payroll, but if I'm understanding what you've said, you are still on the payroll for November?

However, SMP does get complicated as it's worked out weekly so if you're paid monthly, the maternity pay out can get a bit odd. But you should be paid at 90% of your regular pay for 6 weeks. And then the statutory amount for the rest. Also, depending on when you took maternity leave, there may be some complication regarding your redundancy and the SMP - I'm not sure how the company would pay any outstanding SMP due post redundancy.

I would call HR/payroll and ask them to please provide the calculation they used.

You have accepted redundancy so it's not mat pat it's redundancy pay. Uc is means tested but job seekers is not - if you have sufficient ni paid you can claim jobseekers for 6 months but you must be "looking" for work however they are not enforcing much job activity due to covid (I'm doing a 6 week online course fully paid for!) added advantage is that jobseekers is paid quicker

@37weekswithno2

This happened to a friend who was returning to the company afterwards. They paid the whole lot in a lump sum in March, so she had to pay a lot of extra tax compared to if she had received it monthly over the next 9 months.

Tax is based on a yearly basis so she shouldn't have had to pay extra. If she was put onto the wrong tax code she could just phone Hmrc and they would adjust it and pay her back anything she's owed.

Although op I do wonder why you took voluntary redundancy too if you weren't benefitting from it.

It will be NI that will be higher if paid in a lump, might also mean you don’t pay NI during some weeks and therefore don’t qualify for some benefits. Might you be able to claim statutory maternity pay for the weeks after the lump sum? Definitely contact the citizens advice bureau, this is exactly what they are here for.

@movingonup20

You have accepted redundancy so it's not mat pat it's redundancy pay. Uc is means tested but job seekers is not - if you have sufficient ni paid you can claim jobseekers for 6 months but you must be "looking" for work however they are not enforcing much job activity due to covid (I'm doing a 6 week online course fully paid for!) added advantage is that jobseekers is paid quicker

but should she be claiming job seekers when she is still on maternity leave? say if she wasnt entitled to mat pay for whatever reason but was claiming maternity allowance direct from government she would be getting that for 9 months or whatever it is now. I dont see how the mat pay can be classed as redundancy pay.. because its not is it?

the redundancy pay will be 1.5 weeks wages....

Redundancy is NOT classed as income for UC purposes so unless you have savings of more than £6000 then UC is not affected.

Also happened to a friend and she had the admin of having to reclaim the overpaid tax. Ask payroll to give you a breakdown of your final pay & how SMP has been calculated.

@37weekswithno2 sorry but you're wrong. By receiving it as a lump sum in March at the start of maternity she'd have been taxed in full at her highest rate as she would have presumably already used up all her tax free pay in that tax year if pay was for full time. If she'd received it every month in the next tax year she wouldn't have paid any tax on it as it would have been under the tax threshold. Probably cost her £1200

@ginislife I missed the March payment date, apologies. It does mean she'd be paid less in the next tax year though. Although when someone needs the money right then that obviously isn't useful

In regards to UC you obviously won't receive any payment as you'll have enough money to live on however you won't have to apply again. The payments will just stop and you can reactivate your old account again and receive payments straight away (4 weeklyish). You will only have to apply again if you don't receive UC for 6 months, then you'll have to wait the 5 weeks for the first payment.