Maternity benefit complicated but it’s worth investigating
The rules have become complicated, but it is of utmost importance that potential recipients make themselves aware of the rules, in order to access it.
For those who qualify, the payment is made for 26 weeks at €230 per week, or a total of up to €5,980. for low income couples with children, payments can be higher.
As a starting point, the payment is made to women who are normally employed, but the benefit applies also to the self-employed.
From a farming perspective, the benefit can apply to women farmers who are either farmers solely on their own or who farm in partnership with their spouse.
The benefit can also apply to both full time and part-time workers.
To qualify, a person must have sufficient PRSI paid, usually this is satisfied by having at least 39 weeks of PRSI paid in the 12 months before maternity leave.
Alternatively, if the person has at least 39 weeks of PRSI paid, and at least 39 weeks of PRSI paid or credited in the year prior to their claim, or the preceding year, the benefit can apply.
It’s even possible to qualify by combining PRSI contributions across two years, if at least 26 weeks of PRSI were in both years.
In that case, the assessment is based on the second and third year prior to going on maternity leave.
For example, if you are going on maternity leave in 2016, the assessment is based on 2014 and 2013 in the case of combining PRSI across years.
For the self-employed. slightly different PRSI rules apply.
The individual is first assessed on whether they have 52 weeks of PRSI paid in the year before the preceding year.
For example, if you are going on maternity leave in 2016, the assessment is based on year 2014.
If sufficient PRSI hasn’t been paid in that year, the assessment can be based on the following or previous year (either 2015 or 2013, in this example).
Since 2011, self-employed persons only pay PRSI where earnings are above €5,000 per annum, with a minimum payment of €500 per year.
For employees, only PRSI classes A, E, and H qualify for maternity benefit.
From a farming perspective, farm wages paid by an employer to their son or daughter, where that child also resides on the farm, is usually subject to class J social insurance, which does not qualify for maternity benefit.
Interestingly, payments by an employer to their female spouse are not reckonable for PRSI, meaning no PRSI is paid which would entitle that individual to maternity benefit.
To be regarded as an employee, a person is employed in the family business under the same terms and conditions as a worker who is not a relative.
You would, for example, be subject to control, direction and dismissal by the employer, receive a salary and holiday pay, and have no control over the running of the business.
In contrast, an individual who assists their spouse or civil partner in the running of the family business, but doesn’t fall into the category of an employee, is liable for Class S (self-employed) PRSI, subject to having sufficient earnings of over €5,000 per annum.
In addition to the PRSI requirements, the person must be in insurable employment (or self-employment) within the period of their pregnancy, starting at or within 16 weeks of the end of the week in which the baby is due.
Maternity benefit is usually paid from the two weeks prior to your baby’s due date, and applications should be submitted six weeks for employees, or 12 weeks for self-employed, before your intended start date.
In the case of late applications, the Department of Social Protection does not normally entertain applications more than six months late.
Full details and application forms are available at any social welfare office.
From July 2013, maternity benefit has become a taxable source of income similar to jobseekers benefit, which can lead to nasty tax surprises at year end, if the tax outcome had not been factored in.
Meanwhile, good news is on the way for would-be fathers, the Government is to legislate for statutory paternity leave of two weeks, to take effect from September, 2016.
