Question to the Department for Work and Pensions:

To ask His Majesty's Government whether they plan to review the treatment of Maternity Allowance as unearned income, so that employed women receiving Maternity Allowance are not worse off than those on statutory maternity pay and Universal Credit.

We want new mothers to be able to take time away from work in the later stages of their pregnancy and in the months following childbirth in the interests of their own and their baby's health and wellbeing.

Maternity Allowance is intended for those who cannot get Statutory Maternity Pay and is designed to have a range of in-built flexibilities making it accessible to as many women as possible. Work is underway to make Maternity Allowance even more accessible so that women will, in future, be able to make their claims online. Further information on when this will be available will be provided in due course.

There are two qualifying conditions for Maternity Allowance: a woman must have worked for at least 26 weeks in the 66 weeks prior to the expected week of childbirth and she must have average weekly earnings at least equal to the Lower Earnings Limit for National Insurance purposes (£123.00 a week, 2023/24).

The work does not have to be for the same employer nor continuous, nor undertaken on the same basis. A claim can be made where there is a mixture of employment and self-employment and work for part weeks also counts as a full week’s work when calculating entitlement. A women can choose any 13 weeks within the 66-week period to calculate her earnings. To ensure that women gets the best rate, we have introduced a real time information calculator tool in collaboration with HMRC. Full details of eligibility and how to apply for maternity pay are available on Gov.uk.

Statutory Maternity Pay is paid by employers and reimbursed by HMRC and is treated as earnings in Universal Credit (UC). As with other earnings, SMP is subject to the work allowance and tapering rules that are built into UC. Maternity Allowance is a contribution-based benefit paid by the State and is classed as unearned income in the same way as other benefits.

The High Court judgment in 2020 upheld the policy of treating Statutory Maternity Pay paid by employers as earnings as well as the treatment of Maternity Allowance. A subsequent joint NI court judgement on 25^th April 2022 also upheld the treatment of MA as unearned income in UC.