Baby steps Months to get ma­ter­nity pay

Na­tional In­sur­ance shake-up

The Daily Telegraph - Your Money - - FRONT PAGE -

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

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