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IT’S often said that it takes a village to raise a child. Wouldn’t it be nice if the village occasionally chipped in towards the cost of raising one too? Especially as the gender pay gap already puts women on a financial back foot with what’s often referred to as the parenthood penalty (widely regarded as one of the largest contributing factors to the gender pay gap).
And as if taking time off to raise your child doesn’t come with its own set of unique challenges… to add insult to injury it’s likely that you’ll also find yourself out of pocket at a time when you’re already needing your money to stretch further (just how much depends on your employment status). So, what statutory maternity pay and maternity leave is on offer when your little bundle of joy enters your life? And what can you do to financially prepare yourself?
1. Statutory Maternity Leave - if you’re employed
Many employers put together their own maternity packages (which are often more beneficial than the minimum requirements outlined here), so make sure you check that out first. But if you already know your employer only offers statutory maternity leave, here’s what it will mean to you.
Statutory Maternity Leave
Statutory Maternity Leave is up to 52 weeks. This is broken down into ordinary maternity leave (the first 26 weeks) and additional maternity leave (the last 26 weeks). You don’t have to take all this time, but it’s what you’re entitled to.
The minimum amount of time you must take off after having a baby is two weeks after its birth (this goes up to four weeks if you work in a factory).
Statutory Maternity Pay
You’re eligible for up to 39 weeks’ pay and entitled to:
- 90% of your average weekly earnings (before tax) for the first six weeks.
- You’re then entitled to £151.97 or 90% of your average weekly earnings (or whichever is lower) for the remaining 33 weeks.
You can read more about statutory maternity pay and leave here.
2. Maternity Allowance - if you’re self-employed
How much maternity leave you take when you’re self-employed is entirely up to you. After all, if you don’t work - you don’t get paid.
Maternity Allowance eligibility
You might need a calendar in front of you to work this out. But basically, you’ll qualify for Maternity Allowance for 39 weeks if in the 66 weeks before your baby’s due, you’ve been:
- employed or registered as self-employed for at least 26 weeks.
- earning (or classed as earning) £30 a week or more in at least 13 weeks - the weeks do not have to be together.
- You may still qualify if you’ve recently stopped working. It doesn’t matter if you had different jobs or periods of unemployment.
Maternity Allowance pay
You can get paid between £27 to £151.97 a week for 39 weeks if you’re self-employed. Just how much will depend on how many Class 2 National Insurance contributions you’ve made in the 66 weeks before your baby is due. To get £151.97 per week, you’ll need:
- to have been registered with HMRC for at least 26 weeks in the 66 weeks before your baby is due.
- to have paid Class 2 National Insurance contributions for at least 13 of the 66 weeks before the baby is due
Read up on Maternity allowance here.
3. Other half?
If you have a partner, there are a couple more avenues to explore.
Paternity leave - your partner could be eligible for one or two weeks paid Paternity Leave. Times are changing and employers are moving with them. If your partner is employed, it’s worth checking what their paternity leave and pay is. More about Paternity Leave.
Shared Parental Leave and Pay - for anyone that’s having a baby, using a surrogate or adopting a child, you and your partner may be able to get Shared Parental Leave and Pay. You can share up to 50 weeks’ leave and 37 weeks’ pay between you. Read more about Shared Parental Leave and Pay here.
4. Extra support
If you live in England and Wales and this is either your first child, or you’re expecting a multiple birth, you could be eligible for a one-off payment of £500 to help towards the cost of having a child. You can find out more about the Sure Start Maternity Grant here. It’s slightly different if you live in Scotland and you can apply for a Pregnancy and Baby payment here.
Having a baby is one of life’s most special moments. Nothing can prepare you for it. But a little pre-planning might just help ensure that any sleepless nights you do have are down to your little one… and not money worries.