Self-Employed Maternity Allowance Explained

Self-employed and wondering whether you’re entitled to maternity allowance while you take time off for your baby? Then keep reading! Here you’ll find out what maternity allowance is available for the self-employed, how to apply if you are entitled and for how long while you take time away from your business.

Updated 11 October 2021

Friendly Disclaimer: Whilst I am an accountant, I’m not your accountant. The information in this article is legally correct but it is for guidance and information purposes only. Everyone’s situation is different and unique so you’ll need to use your own best judgement when applying the advice that I give to your situation. If you are unsure or have a question be sure to contact a qualified professional because mistakes can result in penalties.

1. What is Self-Employed Maternity Allowance?

Maternity allowance is a state benefit paid to mums to be who are not entitled to statutory maternity leave and pay. When someone is employed in a job, they are usually entitled to statutory maternity pay and leave by law from the government. Their employer will organise their state maternity benefit owed on behalf of the government and pay it to them, along with issuing a payslip to show how much has been paid. However when you work for yourself, it’s up to you to organise getting your payment from the government while you take maternity leave – this is known as maternity allowance.

2. Who Qualifies for Self-Employed Maternity Pay?

People who qualify for maternity allowance are those who are:

  • Registered as self-employed;
  • Playing a part in the self-employed business of their spouse or civil partner;
  • Agency workers without employment rights.

In additional to the above, you’ll need to have:

  • Been registered as self-employed for at least 26 weeks in the 66 weeks before your baby is due to arrive;
  • Average weekly earnings of at least £30 a week for 13 of the 66 weeks before your baby’s due date;
  • Be planning to stop work to have your baby;
  • Paid 13 weeks of class 2 national insurance contributions.

3. How Much is Self-Employed Maternity Allowance?

The full rate of self-employed maternity pay is paid for 39 weeks at the lower of:

  • £151.97 per week or;
  • 90% of your average gross weekly earnings (before tax)

Payments start 11 weeks before your baby’s due date, but you can’t claim until your 26th week of pregnancy.

Your allowance is paid every 2 weeks or every 4 weeks in arrears and can be transferred directly into your bank account if you provide your bank details on your application form.

3.1 The Reduced Rate Maternity Allowance

There is a reduced rate of maternity allowance if paid where individuals:

  • Someone has been self-employed for less than 26 weeks;
  • Help in their partners self-employed business;
  • Have not paid enough class 2 NICs.

The reduced rate is £27 a week for 39 weeks or 14 weeks.

The easiest way to check how much maternity allowance, paternity pay and leave you are entitled is to use the HMRC Maternity Pay Calculator.

3. How to Apply for Self-Employed Maternity Allowance

You can claim your maternity allowance at the start of the fourteenth week before the week your baby is due, even if you are still working, using an MA1 Form.

3.1 What is a MA1 Form?

An MA1 form can be completed online or on a printed version. Whichever you choose, it will need to be printed and posted to HMRC to the address below.

The form tells HMRC a bit about you and when your baby is due so that they can work out if you are eligible for maternity allowance. You’ll also need to include personal information like:

You’ll get a decision on your application within 24 days of receiving your MA1 form. If it is approved, you’ll start to receive payments on the Sunday of the 11th week before your baby is due.

3.2 Is There a Time Limit to Make Your Claim?

You must make your claim within 3 months of the start date of your maternity allowance period or 14-week period is due to start. If you claim too late, you’ll lose money.

4. When Do Your Maternity Payments Start?

Whether you or your partner are self-employed, you can generally choose when you want your maternity allowance payments to begin. The latest it can start is the day after your baby is born or you stop taking part in your partners business.

Being self-employed is a responsibility, so it’s helpful to know you can work up to 10 days during your maternity allowance period with losing any of your mat pay.  These are known as “keeping in touch days”.

That means if you choose to work closer to your due date you can choose to start your payments when you stop working so you get more time off once baby has arrived.

5. Maternity Allowance When You’re Involved in Your Spouses Self-Employed Business

If your partner is self-employed and you help in their business, then you may be eligible for the reduced rate of maternity allowance of £27 a week for 14 weeks.

There is a 26 week test period to check your eligibility. During this time frame you must demonstrate you are involved in the business as well as being:

  • Married or in a civil partnership with the self-employed person;
  • Not been employed by your partner or spouse (in which case you’ll be entitled to statutory maternity pay);
  • Your partner must be working as a self-employed earner in the business;
  • Your partner is registered as self-employed and pays Class 2 national insurance contributions.

You must not be employed by your partner and entitled to statutory maternity pay from your employer.

If you help in your partners self-employed business, you’ll need to provide details about when you worked there and what you do in the business, along with their personal details. You’ll need to send additional evidence with your form to support your application including:

  • Marriage or civil partnership certificate
  • Proof of your baby’s due date (MATB1 Certificate)
  • Birth certificate, if you are claiming after your baby was born

Keeping in touch days don’t apply if you help in your partners business. If you continue to help your partner, you risk losing allowance payments for each week you work during the 14 week period.

6. Is Maternity Allowance Taxable?

Maternity allowance is not a taxable benefit and you do not need to include it when you fill in your tax return.

7. Does Maternity Allowance Affect Other State Benefits?

It may have some impact on other benefits that you may be claimed due to the benefits cap including:

8. Can Maternity Allowance Be Backdated?

If you are late submitting your application, your payments can be backdated up to 3 months. Any more than 3 months and you’ll lose the money you are entitled to.

9. Can I get Statutory Maternity Pay and Maternity Allowance?

No, you cannot claim both. If you are eligible for SMP, then you must claim this. You can claim maternity allowance if your employer refuses to pay you SMP.

10. Can You Claim Maternity Allowance if You Haven’t Registered as Self-Employed?

Maternity allowance requires you to have paid class 2 national insurance.  If you haven’t paid into the system you can’t take anything out. If you have been working for yourself then you should get registered sooner rather than later to protect your claim.  Many people choose to register and pay voluntary class 2 national insurance to protect their access to state benefits.

11. Where to Get More Help

The rules can be quite complicated and everyone’s situation is different.  The best start to with help making your claim is to contact HMRC Wrexham at:

Wrexham Maternity Allowance
Mail Handling Site A
Wolverhampton
WV98 1SU
Telephone – 0800 169 0283

Related:

Taxes are changing! From April 2024 sole traders will need to report their earnings and pay tax on a quarterly basis. This is known as Making Tax Digital, which you can read more about in this guide to help you get prepared.

About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek, money nerd and creator of www.goselfemployed.co - the UK small business finance blog for the self-employed community. Here she shares simple, straight-forward guides to make self-employment topics like taxes, bookkeeping and banking easy to understand.