MATERNITY PAY DELAY
Delays are caused by changes to ‘Class 2’ NI collection
THOUSANDS of new mothers are facing lengthy delays in receiving vital state maternity cash because of Government changes in the way National Insurance is contributed. The hold-ups in payments of maternity allowance, in some instances three months, have angered mothers and charities representing them.
Ros Bragg, head of charity Maternity Action, calls the delays ‘unacceptable’, saying: ‘The last thing women need when bonding with a baby is extra financial worry, especially against a backdrop of a substantial drop in maternity benefits.’
One mother, Sarah Newton, from South Norwood in South London, who contacted The Mail on Sunday, has been waiting nine weeks already for her full allowance.
She is furious she has not received payment. Sarah says: ‘The allowance is crucial when you are not able to earn. I’ve had phone calls that have suggested it’s down to computer problems. All these Government departments have creaking systems that need maintaining and upgrading.’
Maternity allowance is paid to mothers who are self-employed and therefore not eligible for statutory maternity pay. The maximum weekly payment is £139.58, paid for 39 weeks.
To get it, they must have paid Class 2 National Insurance Contributions – currently £2.80 a week – for at least 13 of the 66 weeks before a baby’s birth. In the past these payments were made either by direct debit or quarterly and so would usually be up to date by the time a mother needed to claim.
But in April last year the Government ended this system and now collects contributions through the self-assessment tax return – meaning the self-employed are likely to be in arrears.
Gillian Wrigley, from the Low Incomes Tax Reform Group, says: ‘The self-employed now don’t have to pay the contributions until January 31, 2017, which is the deadline for filing a tax return for the 201516 tax year. So women claiming maternity allowance may not have paid enough contributions to qualify. We had a caller to our helpline who was given the run-around when she applied for the allowance.
‘She was told there would be a 16day wait while they assessed her application.
‘The Department for Work and Pensions agreed to pay her a lower rate of allowance of £27 a week. But it would not pay her full entitlement until she had paid her outstanding Class 2 contributions. It then informed her there would be a further 22-day wait before her full allowance was paid.’
Sarah Newton, who gave birth to son Joshua early last month, is in a similar position. The 42-year-old self-employed garden designer says: ‘I was declined the allowance as I had unwittingly not paid my contributions because I had not been sent my usual invoice.’
Sarah, who is married to Martin, 46, and also has a four-year-old daughter Isabelle, made a series of frantic calls to both the Maternity Allowance helpline and Revenue & Customs. She was told she needed to make missing Class 2 payments of £30.80 before her application could be assessed. But she could not make this payment until an invoice had been issued.
The authorities agreed in the meantime to pay her the minimum allowance of £27 a week, backdated to June 28. The National Insurance invoice finally arrived eight days ago and she paid it immediately.
Sarah says: ‘I was told it can take up to 17 working days to be notified of the final allowance so by the time I get the full amount I will have waited three months.’
She added: ‘We are both selfemployed and money is tight. Some families will find it financially crucifying not to get the allowance on time.’
In recent years, a number of maternity benefits have been axed or cut, including Child Benefit, Health in Pregnancy and SureStart.
The Revenue, responsible for paying maternity allowance, said that the changes to the way National Insurance is paid are a ‘simplification’ of the process and denies there has been a ‘computer glitch’.
A spokesman for the Revenue said: ‘We are processing all payments as normal. Certainly no one should be waiting eight weeks at such a critical financial time in their lives.’ He accepted that the service given to Sarah was not good ‘by a long shot’.
He added: ‘To satisfy the conditions for Maternity Allowance entitlement, Class 2 contributions can be paid voluntarily to the Revenue before the January 31 deadline for self-assessment.’
IF YOU are self-employed and have faced problems claiming maternity allowance please contact sally.hamilton@mailonsunday.co.uk