The last thing new or expectant mums need is the worry that they will not receive the maternity pay they were expecting from their employer. At such an expensive time, every penny will usually be accounted for, and any change to your financial situation will be a cause for concern.
The good news is that if your employer has entered into liquidation or administration then your maternity pay will instead be paid by HM Revenue & Customs. However, HMRC will only pay you at the statutory level. If you were due a higher level of maternity pay from your employer then you will have to try and claim the excess owed to you from the company in liquidation, and, as a preferential creditor, you may only receive a small proportion of the money you are owed, or potentially nothing at all.
How much maternity pay can you receive from HMRC?
To qualify for statutory maternity pay (SMP), you must have been continuously employed by the business for at least 26 weeks up to any day in the ‘qualifying week’. The qualifying week is the 15th week before the expected week of your child’s birth. If you meet the qualifying criteria, statutory maternity pay will be paid for up to 39 weeks and you can expect to receive:
- 90 percent of your average weekly earnings for the first six weeks.
- £148.68 or 90 percent of your average weekly earnings (whichever is lower) for the next 33 weeks.
How should you claim maternity pay if your company closes down?
If your employer is insolvent, the insolvency practitioner will normally send you the necessary forms to claim any money you are owed. If this doesn’t happen, you should write to the insolvency practitioner setting out your claim. They should also tell you how to claim your statutory maternity payment from HMRC. If they don’t, call the HMRC national helpline.
Unfortunately, not every case is quite so clear cut
Once a company has been declared insolvent, HMRC will cover the statutory maternity pay for the full term. However, until the week of the insolvency itself, all maternity payments should be paid by your employer. The problem comes if the employer does not have the funds to make maternity payments but is yet to officially enter insolvency.
If your employer refuses to pay your statutory maternity pay but is not yet insolvent, you should call the HMRC Statutory Payments Disputes Team on 0300 056 0630. As soon as an insolvency practitioner is appointed, you should contact them from a claim form.