Pay and Leave During Maternity – How Does it Work?

Pay and Leave During Maternity – How Does it Work?
Syd Barhey

Syd Barhey


June 2022


June 2022

The impending arrival of a new addition to the family should be an exciting and wonderful experience, but what does this mean for our rights and entitlements as employees and what duties does it impose upon employers? This article explores some of the main issues arising from both perspectives.

Maternity Leave

All employees are ordinarily entitled to take up to 52 weeks off from work as Maternity Leave from the moment they start work – it is a right that is available to everyone irrespective of the length of time they have been employed.

The first 26 weeks of leave are classed as Ordinary Maternity Leave (OML) with the remaining 26 weeks classed as AdditionalMaternity Leave (AML). The difference between the two relates to the rights of the employee to return to work in their original job at the end of their leave. At the end of OML, an employee has the right to return to their original job. At the end of AML, whilst an employee also has the right to return to their original job, if it is not practicable for the employer  to offer them their old job back, they must be offered appropriate similar employment, on no less favourable terms, and with their seniority and pension conditions unaffected.

An employee is not obliged to take all of this time off but they would normally be expected to take off the first two weeks after birth as maternity leave (this period is extended to four weeks for factory workers). It is unlawful for an employer to allow a woman to work during this compulsory maternity leave period.

The earliest an employee can start their maternity leave is 11 weeks before the expected week of childbirth (this will be on the MATB1 pregnancy certificate given by the midwife or GP) – however where the baby arrives early, maternity leave can be triggered automatically and will usually start the day after childbirth. In addition, where an employee has complications or any other pregnancy related illness, maternity leave can also start at any point in the four weeks leading up to childbirth.

Whilst they are away on maternity leave, an employee is entitled to all of the contractual rights that they would have received if they had been employed except for their wages. Especially important amongst those is that an employee continues to build up their annual leave entitlement in line with their employment contract during maternity leave and they may also choose to use their accrued holidays as a way of extending their maternity leave once the 52 weeks come to an end.  

Also important is that an employer cannot in any way discriminate against an employee whilst they are on maternity leave and employees may seek advice from legal or union representatives where they feel they have been unfairly treated.

Any employer occupational pension contributions must continue to be paid in full during maternity, paternity and adoption leave throughout the time when the leave is paid - whether through statutory or contractual maternity pay (It's worth being aware that many payroll software packagaes whilst automatically calculating maternity pay, will not always adjust the pension contributions to the right level so these may require manual intervention). Pension contributions usually stop during any periods of unpaid leave. The whole of the leave period – paid and unpaid – must be taken into account when assessing length of service for occupational pension purposes.


Statutory Maternity Pay

Statutory Maternity Pay (SMP) is payable for the first 39 weeks of maternity leave. This means therefore that the whole of OML and the first 13 weeks of AML will be paid. The remainder of AML should it be taken will be unpaid leave (or may inpart at least use accrued annual leave).

The first 6 weeks of SMP are paid at a rate of 90% of an employees average weekly earnings (before tax)

The remining 33 weeks are paid at the lower of 90% of an employees average weekly earnings or £156.66 per week (2022/23 rate)

So for example, an employee on an annual salary of £26,000 would have average weekly earnings of £500 per week. The SMP they should expect to receive would be £500 x 90% = £450 per week for 6 weeks and then £156.66 for the remaining 33 weeks – A total of £7,869.70 across 39 weeks.

Alternately, someone working 12 hours a week for £11.00 an hour would have average weekly earnings of £132.00 per week. They should expect to receive SMP of £132.00 x 90% = £118.80 per week for all 39 weeks – a total of £4,633.20.

Where an employee has a contractual right to maternity pay that is higher than the statutory amount, they have the right to opt for whichever of the two is the most generous – but not both.

SMP starts when an employee takes their maternity leave and is subject to the usual deductions for tax and national insurance


Who gets SMP ?

The conditions to receive SMP are not the same as maternity leave so it’s important to appreciate that just because an employee is entitled to time off for having a child, they may not always be entitled to get paid for it.

Generally speaking, SMP is only available to employees with a contract of employment. However, agency workers can also qualify for SMP provided they meet the minimum requirements as to length of continuous service and earnings. Those who are genuinely self-employed do not qualify for SMP – they may however be eligible to claim Maternity Allowance (see later) which is a benefit paid by the Government.

Employees should meet the following three conditions to be paid for maternity leave

1.   They must have worked for at least 26 weeks by the end of the Qualifying Week. The Qualifying Week is the 15week before the baby is due;

2.   They must be employed in their job in the qualifying week (although it doesn’t matter if they are sick or on holiday in that week);

3.   They must have been paid at least the Lower Earnings Limit (LEL) on average in the 8 weeks (or two months for monthly paid employees) up to the last pay day before the end of the Qualifying Week. The LEL for 2022/23 is £123.00 per week or £533.00 per month

To claim SMP, an employee should tell the employer at least 15 weeks before the due date when the baby is due and when they intend to start maternity leave. The employer may ask for this in writing and may also ask for evidence of the pregnancy and due date - a MATB1 certificate completed by a GP or midwife (usually available from around 20 weeks before the due date) will suffice for this purpose.

The employer then must confirm to the employee within 28 days, the amount of SMP payable, when it will start and when it will end. Once confirmed and agreed, an employee cannot change the date their maternity pay starts, even if they change the date their maternity leave starts

Where an employee is adjudged to be ineligible for SMP by the employer, they must give them a form SMP1 within 7 days and explain why they are ineligible. Employees who are not eligible for SMP may be eligible for Statutory Maternity Allowance (see later)


Statutory Maternity Allowance

Statutory Maternity Allowance (SMA) is a Government benefit that is payable for up to 39 weeks to those who

·     Are employed but are not eligible for SMP

·     Are self employed

·     Have recently stopped working

·     Take part in unpaid work for the business of their spouse or civil partner

A claim for SMA can be made as soon as an individual has been pregnant for 26 weeks with payments starting up to 11 weeks before the expected due date.

SMA is paid at the lower of £156.66 perweek or 90% of an individuals average weekly earnings. Therefor the maximumavailable is £6,109.74.

For the self employed, the amount of SMA available will depend upon the level of Class 2 National Insurance paid in the 66 weeks leading up to the birth. To get the full amount of SMA

·     Anindividual must have been registered as self employed with HMRC for at least 26 weeks in the 66 weeks before the birth date

·     Have paid Class 2 NI contributions for at least 13 of those 66 weeks

Where less than 13 weeks of contributions have been paid, the Maternity Allowance will be calculated based upon the number of weeks contributions have been made. If no contributions have been made, SMA will be paid at a rate of £27 per week.

In the event of a shortfall, the amount of maternity allowance available can be increased by making up the shortfall in Class 2 NI contributions. Once a claim for SMA has been made, HMRC will indicate the extra NI contributions required to claim the full allowance. Given that these contributions are currently £3.15 per week, it will usually make sense to top up NI contributionsin this way where this happens.


Sure Start / Best Start Maternity Grant

A Sure Start Maternity Grant is a one off payment which is paid to qualifying individuals who are becoming parents (or adopting or becoming surrogate parents) for the first time. In Scotland, it’s called a Best Start Grant and is made up of three payments. The grant can be claimed from 11 weeks before the due date (15 weeks in Scotland) and up to 6 months after (for adoption and surrogacy, the time line is extended to one year).

In addition, individuals who already have a child under the age of 16 may be able to claim the grant if they live in Scotland or live elsewhere in the UK but are now expecting twins or triplets.

To qualify, the claimant must be in receipt of one of the following  

·      income-based jobseeker's allowance

·      Income-related employment and support allowance

·      Income support

·      Pension credit

·      Child tax credit

·      Working tax credit that includes a disability or severe disability element

·      Universal credit

Claimants may also qualify if they're getting a Support for Mortgage Interest loan.

The amount of grant payable is as follows

·     First Child - £500 (In England, Wales & NI) - £606 (Scotland)

·     First Child but twins - £1,000 (In England, Wales & NI) - £1,212 (Scotland)

·     Have children under 16 and expecting another child - £0 (In England, Wales & NI)- £303 (Scotland)

·     Have children under 16 but now expecting twins - £500 (In England, Wales & NI) -£909 (Scotland)

·     Have children under 16 but now expecting triplets - £1,000 (In England, Wales &NI) - £1,212 (Scotland)

The grant is claimed by filling in an application form – this will also require sign off from a doctor or midwife. In Scotland, the application can also be made on-line