SE76360 – Social security benefits: Statutory Maternity Pay

Sections 19(1)1 and 150(d) ICTA 1988

Summary

Statutory Maternity Pay (SMP) is a maternity benefit payable to women while they are absent from work in the last weeks of pregnancy and during the first few weeks after the baby is born. It is for women who are or have been employees with the same employer for a continuous period of six months.

A woman who qualifies receives

• a “higher rate” payment based on 90 per cent of her normal weekly pay over a certain period for the first six weeks
• a flat rate “lower rate” payment for the following 12 weeks.

Any enquiries about entitlement to SMP should be referred to the local Benefit Office.

SMP is taxable

Although SMP is a Social Security benefit, Section 46 of the Social Security Act 1986 requires employers to make the payments. If the woman is still an employee, the payments are emoluments of an employment and so are chargeable to income tax under Schedule E by Section 19(1)1 ICTA 1988.

An employer is still required to pay SMP even if the employment ceases. Also, in exceptional circumstances, the DSS pays SMP direct to the claimant, but without operating PAYE (EP1015 tells you how to deal with these cases). Where payments of SMP do not arise from an employment, Section 150(d) ICTA 1988 ensures that the payments are still chargeable under Schedule E.

National Insurance contributions are payable on SMP.

Use of the abbreviation “SMP”

The abbreviation “SMP” is used in DSS literature and certain PAYE guides and forms. You can use this abbreviation when dealing with employers, Collectors and other tax offices, if the context clearly indicates that “SMP” cannot refer to small maintenance payments (RE1150).