Maternity pay!

[MetallicInk]

Is anyone else shocked at how low statuary maternity pay is? After the initial 6 weeks to drop to £138 a week is a massive drop in income for us.

Yeah. I don't even qualify and haven't heard back about mat allowance yet!

Yep. I don't even get 6 weeks at 90% as I'm self employed.

It won't even cover the mortgage let alone anything else.

My Dsis said 'but everyone gets more than the statutory'..... i pointed out she works in the public sector. She's shocked that I'm looking at going back after about 10 weeks, but SMP represents over 80% drop i salary (and nowhere near mortgage). She was upset at having had to go back after 6 months off on full pay!!

Personally I'd rather we had a shorter mat leave but at higher pay eg 90-100% for 3 months then 50% for another 3.

Ditzzy I'm going back after three months. I did the same with DS. Maternity Allowance for three months is going to kill us as it is - and we saved up to cover bills and so on but it was still a stretch.

I am very envious of people who get more.

yes it's really difficult, I'm not sure how we are going to do it this time round as OH is not in a great position at the moment with work (he's self employeed).
And from what I remember the 138 is still taxed and NI taken out, so it works out at not much over 400 per month!
I took 6 months before but not sure it will be possible this time, but then as soon as you do go back the childcare costs almost make it not worth while

Surely you can't get taxed on SMP? There is a £10k allowance before tax. Plus the NI is only after £153/week.

That said it still sucks and I have decided to have 9 months off and become a batch cook and coupon queen. I am hoping my bf can get a couple of offshore projects to boost his salary a bit.

His salary should just about cover the mortgage, the bills and fuel for the car with a bit left over for him. I will be in charge of bubs and food. But it won't be easy!

Technically SMP is taxable, but it's below the 10k tax threshold so you won't pay any tax on it (and for the first month or so you may get a bit of tax back depending on how much tax you've already paid in the tax year to date).

Surely you can't get taxed on SMP? There is a £10k allowance before tax. Plus the NI is only after £153/week.

Tax and NI are paid on SMP, if you take a short time off or take Mat leave in the middle of the tax year, depending on your earnings you may have already exceeded the Personal allowance. It will be taxable for me as I go on Mat leave in May and return to work in Dec. So, my earnings will easily exceed £10,000 (probably before I even get to SMP)

If you do get taxed, speak to your employer or ring up the tax office, as someone hasn't done it right (or you can claim it back at the end of the year).

Koala - no, your tax free allowance is split over the 12 months, so each month the first £833 is tax free, and you pay tax on anything over that.

Your mat pay is £600 odd a month, so falls within your tax free allowance. It doesn't matter how much you have already earnt that year.

Yes, knittin I realise that. My point is that you would still have to pay tax and NI on that amount, if your earnings exceed £10,000 during the tax year.

What I'm trying to explain quite badly is that you don't. You pay tax on everything over £10,000 that you earn each year. They calculate your tax month on month rather than at the end of the year. This means that, each month, you effectively have £833 tax free allowance, which adds up to your total tax free allowance each year.

So, say, months 1-6, you earn £2000 each month, and pay tax on £1177 of that each month (2000-tax free allowance of 833). So far you have used up 6 x 833 = about £5000 of your total tax free allowance for the year.

Months 7-12 you are on mat leave and earn £600 a month. You still have approx £5000 tax free allowance for these six months, equating to approx £833 a month. Your earnings now fall below the threshold so you aren't taxed on them. In fact, as you are earning £233 a month BELOW the tax free allowance, this extra is offset against the tax you have already paid, and you get a small amount back.

Overall, in my example, over the whole year you have earned £15600, of which you have only paid tax on £5600, as the first £10,000 is your tax free allowance.

Sorry if I misunderstand you Knittin but Koala is right...the personal allowance is an annual amount even if you think of it divided up monthly. So for example if you earn more than the personal allowance of c.10k between April one year and the next, you WILL have to pay tax over the whole year...although your tax code may not catch up until later on or in the next tax year. You have to look at the tax year in aggregate, not month by month - it does matter what you've already earned that year.

Cross posted! Think we're saying the same thing

Yes, you will have to pay tax over the whole year - in my example you do. If you earn £20000 in a year, you pay tax on £10000 of it. But, in any given month, you may pay more/less/no tax on that month's salary, depending on what that month's income is. If your income is uneven, as is the case when you go on mat leave, you may pay tax in some months and not in others. By the end of the year, you have still paid the correct amount of tax on your whole year's salary.

When I was last on mat leave a year or so back, in an April to April tax year I earned significantly more than £10,000, so paid tax overall. But for those individual months where I earned £600 or so maternity pay, I didn't pay tax in those months.

Lol, just reread you curly, yes I think we are talking about the same thing from a different angle!

Yes, think we are saying the same thing! Maybe I'm not explaining what I mean very well though.

I've worked out that with my OMP and SMP during my maternity leave, April 2015 to April 2016, my income will come to £9,954 (thats after Tax and NI deductions). Because this is under the £10k threshold does that mean I'll be getting a rebate for the £200 a month tax that I will be paying from my first 4 and a half months salary? That would come in very handy as I won't be getting a penny from Feb until April!

Before the usual guff gets spouted about public sector can I just remind you that not all public sector workers get enhanced maternity pay, especially not six months. When I worked in the public sector I got 6 weeks on full pay, then a few weeks on half pay and was then on SMP. And yes OP it was a shock for me too and most people I know, not least because we all (foolishly) believed the crap about all public sector workers getting 6 months on full pay. I mean, I actually believed this right up until I was pregnant, having worked in the public sector for years!

I work at a Uni and until a few years ago we did get 6 months full pay on maternity. Its now 18 weeks which I realise is better than alot of places but I dont think it will be long until its reduced further.

clockwisecat thanks for pointing that out. Another public sector worker here that doesn't ever see any of the supposed 'gold plated' benefits the media like talking about so much!

I'd suggest looking into the married tax allowance that's meant to be coming in this autumn. Whether it will happen I guess will depend on the election, but on the gov.uk you can register your interest.

Totally agree clockwisecat I will get 4 weeks full, 2 weeks 90%, then half pay for short time (as long as go back to work - else it's just SMP), then rest is SMP, if take a whole year last 13 weeks I think are unpaid nothing at all. We are already worrying about money (bills, mortgage etc with one less wage) despite trying to put everything we can save into esavings accounts.

"Personally I'd rather we had a shorter mat leave but at higher pay eg 90-100% for 3 months then 50% for another 3."

That would cost a lot more, on average.

OP, it's worth your dp looking into APL policy at his work as he may get some enhancement even of you don't.