PSA - Maternity Allowance and small earnings exceptions

[Sparklies]

Don't do what I did if you're self-employed and hold a Small Earnings Exception certificate and want maternity allowance.

I assumed, from the wording on various forms (and when I applied for the certificate pensions were mentioned, but not MA - but I was told because I had existing young children that this would count in terms of contributions.. only for pensions it seems) that I'd be entitled to full maternity allowance as I held this form. It turns out not to be the case - they assume I've earned £30/week. I'm entitled to maternity allowance, just not "full" maternity allowance. So instead of the full rate of £130 or whatever it is, I get £27 (90% of £30). I wish I'd looked into it better, hindsight is a wonderful thing.

To say we're screwed is an understatement. I'm 26w6d today and have cancelled it immediately in the vain hopes I can get in enough class II contributions before 40 weeks (you need 13 weeks worth) but my baby (high risk) is due to be delivered by EMCS at 38w2d so it'll probably all be for nothing as I won't manage 13 weeks of contributions. So we're £4K out of pocket which is absolutely the last thing we needed. If I'd known this even two weeks ago we'd have been fine.

I hope I can spare at least one person this disaster :(

Sparklies:(. Do they not check this at all against what you've actually earned?! Or is it all just about the NI contributions?!

They only care about whether you hold the certificate or not. Even if I paid NI contributions whilst I was holding the certificate (e.g. backdated them) it still wouldn't count as I physically held the certificate until today :-(

I basically made the mistake of reading "entitled to maternity allowance" and thought it was the full thing. I didn't realise it was on a sliding scale - I thought the sliding scale only applied to people who were submitting payslips etc. I just wish they'd said "If you have one of these certificates, you only get £27 a week" in plain English instead of just saying "you are entitled to maternity allowance as it's assumed you are earning £30 a week" and then somewhere else entirely saying "you only get 90% of what you earn in a week". I didn't link the two :-(

Oh no . I know I didn't have a small earnings exception and he difference it made to us was enormous.

Is there any chance you can back pay the contributions?

Sorry x-posted.

I agree that the forms aren't at all clear about it.

It does almost feel like they're trying to trick you by not making it clearer - it's a huge issue. They must get people in this situation all the time! We're not all experts on benefits so it just seems so harsh to penalise when no deception was meant. They even said to me "Well, if you don't make contributions, you can't expect to get benefits" in a slightly sarky tone which made me livid as until last year I was paying tens of thousands a year in tax and NI. But as I didn't pay £2/month for 13 weeks I lose out massively

Ironically I actually was worried I might have earned over the limit for the certificate this year once MA was taken into account.. no chance of that now..

When did you stop paid employment? I thought I'd have the same problem, but have enough weeks from paid employment in August last year to count.

Hi Sparklies,

I'm so sorry to hear of your situation, it sounds like an absolute nightmare.
And given the circumstances I hope you don't mind me asking, but I've been meaning to get the ball rolling with applying for maternity allowance, and I have to confess I'm slightly confused from reading yours and other posts.
Without being really dense, whats a small earning certificate? And do I need one?

I've been paying class 2 national insurance contributions for the last 2 years, and have been self-employed for this time. Do I qualify?

I really hope you don't mind me asking you, but any advice you may be able to pass on would be fab. BTW, I'm 16 + 3.

Cheers Binkybell

Binkybell - basically if you are self-employed:

If you have a small earnings certificate you get £27 a week MA.

If you do not have a small earnings certificate you get the full rate of £120/£130 MA (sorry don't know exact figures cos it's about a year since mine finished.

LoopyLoops - sadly I stopped in April 2009, so a good 9 months before the "qualifying period" or whatever it is which is unfortunate.

Binky - A small earnings certificate is something you can get if think you are going to earn under £5K (or thereabouts) in the financial year, so you don't have to pay class 2 contributions. I applied for it because my business is new and operating at a loss so I figured I'd save myself literally some pennies. The downsides are that the years don't count towards your pension - however, as a mother who is caring for young children, these years do count towards my pension so it doesn't matter. What nobody did tell me was that it would affect Maternity Allowance too. Given I knew we'd be trying for another baby within a few months of being self-employed, if it had been mentioned I'd have most certainly not applied for it!

If you're earning under the £5K a year you could probably apply for one now as you only need 13 weeks in the last year or so (the "qualifying period" - can't remember exactly how long it is) paying class 2 NICs which you have already done.

You can't apply for maternity allowance until you have your MAT B1 form which you get from your GP/midwife after 20 weeks, and you are not allowed to send off the form before you turn 26 weeks either. MA is claimed from week 29 or whenever you have the baby or a date you choose after week 29, in arrears.

The whole thing is ridiculously complicated anyway so in a way I'm not surprised I missed a minor detail that wasn't flagged up but it's at huge cost to me unfortunately :( The tax office or whoever it is expects us to be experts on it because they are but for most of us we've never done it before and it's so easy to screw up on a technicality.

Sparklies
Thank you so so much for all of your advice. I know what you mean about it being complicated. I've been on the inland revenue website so many times and have really struggled to make sense of it all.
I've just been praying that I've inadvertently been doing the right thing!
I'm really sorry that you've been shafted, it's always the people that abide by the rules that end up ultimately paying the price.

Thank you for posting this Sparklies I have not been self-employed for long & was not even aware that I'd be entitled to anything, so this has been really helpful.

So sorry that things have turned out so badly for you.

Craftynclothy - I'm so sorry I didn't see your post when I replied back! Thank you for your help too, that's made it all the more clearer.

I'm sure it all makes sense if you work with it day in and day out, but if you're not used to it, it is so easy to overlook something.

I'm particularly annoyed about it because I could have been claiming Job Seekers Allowance in the timeframe before I started my own business, but I decided not to as I wasn't genuinely going to be looking for work and I thought it would be unethical even though they would never know. Ironically if I had, I'd qualify for the full maternity allowance now as my NICs would have been paid :-(

Binky as you say, it's those who try to do the right thing that get shafted and there's no leeway whatsoever for honest mistakes. Even if I offered to pay the £26 they wanted (13 weeks of class 2 contributions at £2 a week) now, it's too late. It's so unfair.

littlemissw - Glad I could be of some help! Just don't take out that small earnings certificate

It's ridiculous isn't it? Perhaps I'm really bad at maths, but it seems really simple to me - as long as you've paid the money in one form or another (either over the last 13 weeks or in one big installment), then why shouldn't you be entitled to your MA. It drives me mad hearing stuff like this, it's bureaucracy at it's worst.
It really is unfair.

The reason I can't backpay it is something bizarre like I might have suddenly noticed I was pregnant and want to pay up just so I can get the full amount. I'd understand if the qualifying period was 9 months, but it's 3 months. So anyone could get pregnant, claim to be self employed at any point in the first six months, pay the £26 over 13 weeks and bingo. The only people who get penalised are those who make genuine mistakes :(

And you can't find out you've made a mistake in time because the earliest you can apply is 26 weeks (which I did to the day - I was desperate to do it all correctly) so you don't know about that mistake until you get the letter back like I did today.

I can't even drown my sorrows in wine!!

Aaaarggh, that makes it even worse!!!! It's utterly crazy, how can they not see that this is just ludicrous.

Drinking wine in spirit with you!!!

Just found a really helpful article which pretty much confirms everything I have found out:

businessplusbaby.com/2010/09/08/self-employed-protect-your-right-to-maternity-allowance/

Particularly the comments - sounds like somebody in a similar situation to me.

Hope this helps somebody.. it's probably too late for me unless they'll let me scrape in under the 13 week rule and I am not holding my breath.

Hello Sparklies I have had a weird situation with the MA people as well. I have worked from when I was 15 all the way till May last year I got laid off work (im now 33) I then found out I was pregnant not long after.I had my own house with a mortgage and was seeing my partner every weekend for 2 yrs(as he worked for a family buisness and was 2 hours away and lived with his parents). I lived on my own so I found out I got Income support. We then wanted to move in together so we live in rented accomadation in Rugby I left my home and rented it out (at a loss of £100PM) it would not sell. I told all the benefits and they said claim jobseekers as I was looking for work.

So I did this no one wanted a pregnant woman in the work place I got really fed up. I was told to apply for MA. I did it got refused as I was 8 weeks short for the test period! I was so annoyed we cant afford it just like you. I was then advised to maybe think about becoming self employed to make up my 8 weeks Im still looking for work as well. My family/friends have taken me on as a cleaner (I did this anyway for free for my dad who is not well) so people said they would pay me my £40 per week. I was told I needed to make the NI class 2 contributions or would not qualify for MA. I find this all really stupid dont pregnant women have enough to think about as it is?! I was told you can back pay your NI class 2 cont? Your NI does NOT get paid if your on Jobseekers I also found out. I have just sent off my direct deb class 2 NI cont form. I have paid NI since the age of 16 to 33 never been out of work until now I think the system needs sorting out! What if I had never worked but just worked in my "test period" and paid class 2 cont? Its really screwed up! I do find the MA quite stupid in this resepct.

It's completely backwards, isn't it? And totally ridiculous! They don't seem to care about decades of NI contributions, only £2.40 a week for 13 weeks which anyone can do once they find out they are pregnant. And most of us, who aren't experts on benefits because - shock horror - we've been working for years, get caught out. I wouldn't mind so much if they were fine about honest mistakes but there's no backtracking or ability to pay anything back.

You can backpay NI contributions if you need to. My issue is that I can backpay them all I like but because I held a small earnings exception certificate, they won't count which is just utterly bizarre. The whole "You get denied £4K because of £26 thing despite giving us tens of thousands a few years previously" - what planet is this fair on?

I assumed you did get NI contributions with JSA - that's a pain if you don't :(

Good luck! I hope it all works out - it sounds like there is still time at least!

Hello Sparklies I have just had to type your user name about 3 times this bloody preggers brain!! I think in any circumstance they should look at what you have worked as a whole they know how much NI you have given over the periods you have worked off the NI number. I think it should go off that not how much you have worked in a certain time frame?! That makes sense to me dont know what other people think? Maybe its time for a change? I bet here are loads of people in situations where they cant get it because of whatever trivial reason. I think its a benfit that needs updating. I told my mum about the Jobseekers and she said well I thought your stamp still got paid when on that? Maybe most people think so eh? But its not so. These little things that turn into big things no one tells you about its really stupid. It seems your better off just not working ever and get housed and all the benfits you want and then you can get your £500 sure start as well!! WTF!!! Its all wrong thought benefits where there for help when you need it?

After my rant I think you should ring up again I rang 6 times and got told different things on 4 occasions. I still dont know if I will get it! But im trying. Dont give up and cant you argue the point in a letter? Dont give up try again.

Sorry Scruffyhound I missed your last reply! Yes, you certainly do get told a different thing every time, it is just down to luck who you get and it is grossly unfair. Most people are just trying to do the right thing and don't realise how insanely complicated the system is.

Anyway, I am updating with GOOD NEWS!! This won't apply to you unfortunately but maybe for anyone else reading now or in the future it may help.

Basically it dawned on me that maybe I could change the date of my self employment and move it back, as I only started my self-employment in June i.e. within the 66 week test period. So I rang up the self-employment helpline and asked.. and they said, yep, no problem, but you will have to pay NICs (oh noes!!).

So I now officially started my self employment in April.. and guess what, I didn't have that stupid certificate then as it only started in June. So I cheerfully paid my "missing" NICs to bring me up to the required amount for MA, and wrote an appeal letter to Jobcentre Plus.

On the downside the HMRC NIC office wanted paying for all the NICs since April (about £88 or something silly) as my certificate has been "cancelled as if it never existed" (Jobcentre Plus is in two minds as to whether this counts for the purposes of MA or not, it depends entirely on who you speak to so be warned) But £88 is a great investment in return for my otherwise denied £4,000.

So as far as the MA people at Jobcentre Plus are concerned, I now have more than enough NICs paid with no stupid certificate attached. And today I rang them and they confirmed that I get my MA at the highest rate, backdated to 20th February. HALLELUJAH!!

Persistence and a lot of head scratching got me there in the end. To say I am relieved is an understatement..

Oh, and in case anyone is interested, apparently it's okay to receive payment for work done before your MA starts during the MA period - I still have several clients who owe me £££.

This has been a very good week!

I have a question, maybe a stupid one,

I am 12 weeks pregnant, I was working until last Friday, but then it was a temporary contract and it just came to an end,

I have since registered with the job centre plus, and I am waiting to hear about the JSA, being on the JSA does that mean that I won't get MA full rate? Do I need to make a NI contribution?

Sorry if it is a stupid question but this thread got me worried.

Sorry to hear you are out of work :-(

I don't know anything about JSA and contributions I'm afraid but the fact you were working means you will probably be fine. So long as you were working 26 weeks (I think) in the 66 weeks before your due date, you will get full MA.

NI contributions only apply as related to Maternity Allowance if you're self-employed. They're paid automatically if you're employed.

You might want to give them a call on 0845 6088610 to find out for sure though in your circumstances.

Thank you so much for your quick answer, I will give them a ring,

I know it is not fun being out of work, I was there for a year and they were promising me a permanent job, next thing I know is budget cuts and 3 weeks later I am unemployed,

But I am hoping to find another temporary position.

I've had a similar problem with MA, though slightly different.

I work for an employer and am self employed doing something else.

My DS1 is disabled, so unfortunately I'm unable able to work enough hrs to qualify for SMP as I can't get childcare for him, consequently I claim carers allowance to up our income a little. However, due to claiming carers allowance I am unable to claim MA, due to the fact that they are conficting benefits, it would appear that if you have a disabled child you're not supposed to have anymore[Confused]

Didn't discover this until I was 26 wks with DD,it was in the samll print, it meant we had to do without my income for as long as I don't work, which to be honest, although it's not much it is needed.

Probably not applicable for a lot of people but if it helps just one person it'll be worth posting this.