How does statutory maternity pay work?

Intro

Statutory Maternity Pay (SMP) is a UK government-funded benefit that provides financial support to new mothers during their maternity leave. In this article, we will explain how SMP works, including eligibility, calculation, and payment.

Eligibility and Entitlement

To be eligible for SMP, you must:

• Be an employee earning at least £123 per week (gross) (2024/25 tax year)
• Have been continuously employed by your employer for at least 26 weeks up to the 15th week before your expected week of childbirth
• Provide your employer with the necessary documentation, including your maternity certificate (MAT B1)

Calculation and Payment of SMP

SMP is paid for up to 39 weeks, divided into two phases:

• First 6 weeks: 90% of your average weekly earnings (AWE)
• Remaining 33 weeks: £184.03 per week or 90% of your AWE, whichever is lower

Your AWE is calculated based on your earnings in the 8 weeks leading up to the 15th week before your expected week of childbirth. Tax and National Insurance are deducted from your SMP payments.

Payment Structure

SMP is usually paid by your employer, who can then reclaim some, or all, the costs from the government; the amount they can claim back depends on their small employer status. If your employer is a small business, they may be eligible for Small Employers' Relief.

Extra Leave or Pay

In addition to SMP, you may be entitled to:

• Ordinary Maternity Leave: 26 weeks of leave, which can start from 11 weeks before your expected week of childbirth
• Additional Maternity Leave: A further 26 weeks of leave, which can start immediately after your Ordinary Maternity Leave
• Company Maternity Scheme: Your employer may offer a more generous maternity scheme, which can provide additional pay or benefits

Reclaiming Payments

If you're not receiving SMP or believe you're not receiving the correct amount, you can contact the Statutory Payment Disputes Team for assistance.

Special Circumstances

In the event of an early birth, stillbirth, or death, you may be eligible for SMP or other benefits. Your employer or the government can provide guidance on the specific rules and regulations.

Employment Rights

During your maternity leave, you have the right to:

• Protected Leave: Your job is protected, and you should be treated as if you were still working
• Holiday: You can still accrue holiday entitlement during your maternity leave
• Pay Rises: You're entitled to any pay rises that occur during your maternity leave

Return to Work

After your maternity leave, you have the right to return to work, and your employer must provide a suitable job with the same terms and conditions as before your leave.

Conclusion

Statutory Maternity Pay is an essential benefit for new mothers in the UK. By understanding how SMP works, you can plan your finances and make the most of this valuable support during your maternity leave.