Baby steps Months to get maternity pay

National Insurance shake-up

Thousands of selfemployed pregnant women are facing months of uncertainty and delays in receiving maternity benefits because of recent changes to the national insurance system. After applying for maternity allowance (see right) self-employed women are now receiving confusing correspondence from the Department for Work & Pensions suggesting that they will receive only a fraction of their entitlement.

The problem comes from a change, made in 2015, that sees self-employed people pay their National Insurance contributions yearly, with their tax returns, rather than weekly. This means that when many workers come to apply for maternity allowance, their NI record is incomplete.

Eleanor Bowie, a self-employed designer, is one mother to be hit by the changes. She was forced to wait for two months before she received her full £140-a-week entitlement. She was initially given an allowance of £27 a week.

“There was so much unnecessary paperwork. I applied as early as I was allowed to, which was in August, and after much chasing got my first payment in January,” said Ms Bowie. “Like most self-employed people, I had to finish work as late as I could, which was the end of November, and my little girl was born in mid-December. This meant two months of no money coming in. I’m glad I chased it early on as there’s no way I would have been able to once the baby was born.”

The way the system works means that when women apply for maternity allowance it appears to the DWP that they have not made the required National Insurance contributions. The department then writes to the mothers informing them of their lower allowance, before notifying HMRC, which in turn writes to the pregnant women inviting them to make a voluntary National Insurance payment for 13 weeks. Once this is paid the women should receive their full, backdated allowance.

But, while the money may come in eventually, the additional confusion and delays can be stressful. The precise number affected by this Kafkaesque process is unknown, but there are currently 1.6 million self-employed women in Britain and DWP receives 19,000 applications for maternity allowance from this group every year.

HMRC and the DWP issued a joint statement insisting the requirement to pay in advance was clearly communicated and the whole process should take no more than six to eight weeks. But other women who are going through the system say the letters they receive merely add another layer of confusion.

One woman, who did not want to be named, said she began shaking when she opened the letter from DWP, which appeared to her to be a final decision. She said: “The letter just gave me a complete panic attack. I don’t think that letter is worded clearly at all. It simply says ‘you will get £27 a week’ – no one can pay their mortgage on that.”

It appears that some women may not even realise they could be eligible for more. Another mother, who also did not want to be named, appears to have settled for maternity payments of £27 a week – possibly unknowingly.

She said: “I have had to continue working to keep afloat financially. I had two weeks off to recover before having to work again, and that was after a C-section.

“I have struggled with postnatal depression. My baby is now 16 weeks old and I still struggle with anxiety and guilt related to the stress of working while trying to breastfeed and care for my child.”

HMRC and the DWP said changing the way National Insurance was collected had “lifted an administrative burden” on the self-employed.

Their statement said: “Reforming National Insurance contributions brought much-needed change to an outdated tax system and we have made sure that no one loses out on their entitlements, including maternity allowance.”

Nat Whalley of the Organise Platform, a workplace campaigning website, warned that additional stress at such a late stage of pregnancy could be dangerous. “The Government don’t seem to realise how much their outdated laws are making life difficult for self-employed parents,” she said. “Mums-to-be are being bounced around government departments, trying to prove they’ve paid enough tax to qualify for full maternity allowance.”

Anita Monteith of the Institute of Chartered Accountants explained that from the 2015-16 tax year the self-employed began to pay National Insurance with their tax returns rather than by direct debit. This meant they did not show up on the DWP’s records as having paid.

“Anybody who is in a position to claim will have to go through the ordeal these women have had to endure,” she said,

The Government is currently abolishing Class 2 National Insurance for the self-employed and moving them to Class 3. This is more expensive, but pregnant mothers will have to make only three payments before they are eligible for full maternity pay.

‘I have had to continue working to keep afloat financially’

Eleanor Bowie initially received £27 a week. ‘There was so much unnecessary paperwork,’ she said