Understanding maternity pay

Posted in: Finance Last updated: 06 Apr 2016

Understanding your rights and the payments available during your Maternity Leave can be confusing - should you claim Statutory Maternity Pay or Maternity Allowance? Our video can help explain what you need to know. From finding out how to claim, to what you're eligible for, and for how long.


Note: Just to be clear, this video is not meant to be taken as advice. Also, your individual circumstances are probably different from the examples we’ve shown. The information in this video is correct as at 6th April 2016.

Video transcript

Presenter: If you’re expecting or thinking about starting a family, you’re probably wondering about maternity pay… And rightly so. As a mum of three, I can confirm it’s an important part of the puzzle to put in place. And I’m off to meet my friends to see if they need any advice…

Presenter: Hello ladies, I see that you’ve started without me!

Mum 1: Ah, finally the expert! How are you?

Presenter:  Oh lovely thanks, apart from the fact that Molly is keeping me up half the night!

Mum 1: Oh dear, the joys of being a mum! We were just talking about the different types of maternity pay, because Lucy here’s self-employed, and my brain’s forgotten it all!

Lucy: Yeah, I just want to find out how it all works before we start talking about kids…. 

Presenter: Alright – oh thank you, thank you – well, when I had George and when I had Laurence I worked at the garden centre, erm, so as an employee I was entitled to Statutory Maternity Pay.

Mum 2: I had that I think, they called it SMP.

Presenter: Yeah that’s right, and that would apply to both of you two mums because you were long term employees.

Jasmine: Long term meaning?

Presenter: Well, you have to of been with one employer for at least 26 weeks by 15 weeks before your due date.

Jasmine: Right, so counting back about 10 months before your due date….

Presenter: Yeah exactly that… Or if you’ve been there for less time or you’re self-employed like, erm, Lucy or like how I was when I had Molly, you might be eligible for Maternity Allowance.

Mum 1: Oh gosh it’s all coming back to me now…

Jasmine: So what’s the difference?

Presenter: I knew you were going to say that so I have made you these print-outs…

Lucy: Oooh, very organised!

Jasmine: Thank you for doing that, thank you.

Presenter: My pleasure…

Voice Over: Both types of maternity pay last 39 weeks. In the case of SMP, you’ll receive 90% of your average weekly earnings for the first six weeks and then the standard rate during the 33 weeks thereafter.
In the case of MA, you work out average earnings during 13 weeks of your ‘test period’ and you’ll receive the standard rate for the whole of the 39 weeks. In both cases, the standard maternity rate is replaced by 90% of your weekly earnings if it’s lower than the standard rate.

Lucy: So I would actually receive more if I was a long term employee?

Presenter: Yes, but by the time I had Molly I was self-employed, so even though I got less maternity pay, I needed less childcare. And also SMP is taxed whereas Maternity Allowance isn’t so… You’ve got to weigh up the pros and cons really…

But listen Jas, have you told your boss yet?

Jasmine: I haven’t, I just keep putting it off!

Presenter: Well listen don’t worry, as long as you tell him at least 15 weeks by the start of the week of your due date you’ll be absolutely fine.

Mum 1: Yeah Jas I was really worried about telling my boss… but then as soon as I did - poof! I felt better.

Presenter: Well exactly that. I mean have you decided when want to take your leave?

Jasmine: Well, sort of… I mean I know you can take it from 11 weeks before your due date, but is it worth taking it that soon?

Presenter: Well I took it really early with George, and to be honest with you, I found it so hard to get back into the swing of things after he was born, So when I had Laurence and Molly, I took it as late as possible and then I had loads of free time with them afterwards.

Mum 2: I preferred it better that way too – and you delayed your reduced income that way…

Jasmine: Hmmm, I see what you’re saying… so I just tell my boss?

Presenter: Well no, you’ll need to get your MATB1 form from your midwife which you’ll get at your 20 week check, and then you just need to tell your employer what day you would like to take your leave. And then if you want to change your mind need to give 28 days’ notice in writing.

Lucy: Ah lovely admin!

Mum 2: Yes but think of the time off!

Lucy: Yeah that’s true. So I guess I just need to fill in a form for Maternity Allowance too then…?

Presenter: Well that’s right, you’ll need the same MATB1 form and then you’ll need to get the MA1 form which you can either get either online or from the Jobcentre to Jobcentre Plus to get your Maternity Allowance… in fact I have some forms for you here. 

Jasmine: Oh thanks, for getting us those

Lucy: Yes thanks, that’s great.

Presenter: That’s what friends are for isn’t it…

Mum 1: Right, that’s enough serious talk! How are your pelvic floor exercises going?

Presenter: Claiming maternity pay isn’t difficult and it’s certainly good to know that help is out there. Remember your individual circumstances may vary, so work out whether you’re entitled to Statutory Maternity Pay or Maternity Allowance… and maybe chat to a few other mums to help you decide when it’s right to take your leave. If you plan ahead, you’ll have control over when it starts so it works for you and your family budget. Good luck!

Find out about Maternity Leave and Shared Parental Leave

Understanding your eligibility for Statutory Maternity Pay is important so you can plan your budgets whilst you're off looking after your new baby. Find out more about Maternity Leave and Shared Parental Leave so you know how long you could have.