Maternity benefit - self-employed

catrionanic

Hi guys.

Not actually pregnant at the moment but myself and husband are planning to start TTC in the new year.

At the moment I am employed and pay normal PAYE tax, PRSI and USC. My employer does not 'top up' the state maternity payment. I have been paying tax and PRSI in Ireland for 3 years.

I'm considering leaving my job and becoming self-employed in the new year. I was trying to work out whether this could affect my entitlement to maternity benefit on the revenue website, but it isn't very clear. I'm not sure whether I need to have paid 12 months Self-employed PRSI in order to be eligible, or if I can use the PRSI paid during my three years of employment, even though I would be self-employed at the time of applying for maternity benefit.

Does anyone know from their own experience how this might work?

Penny Dreadful

catrionanic wrote: »

Hi guys.

Not actually pregnant at the moment but myself and husband are planning to start TTC in the new year.

At the moment I am employed and pay normal PAYE tax, PRSI and USC. My employer does not 'top up' the state maternity payment. I have been paying tax and PRSI in Ireland for 3 years.

I'm considering leaving my job and becoming self-employed in the new year. I was trying to work out whether this could affect my entitlement to maternity benefit on the revenue website, but it isn't very clear. I'm not sure whether I need to have paid 12 months Self-employed PRSI in order to be eligible, or if I can use the PRSI paid during my three years of employment, even though I would be self-employed at the time of applying for maternity benefit.

Does anyone know from their own experience how this might work?

I'm afraid I don't know the answer to your question but I think the Citizens Information site might be of benefit to you in helping. Alternatively you could place a call with the Department of Social Protection.

Kristopherus

catrionanic wrote: »

Hi guys.

Not actually pregnant at the moment but myself and husband are planning to start TTC in the new year.

At the moment I am employed and pay normal PAYE tax, PRSI and USC. My employer does not 'top up' the state maternity payment. I have been paying tax and PRSI in Ireland for 3 years.

I'm considering leaving my job and becoming self-employed in the new year. I was trying to work out whether this could affect my entitlement to maternity benefit on the revenue website, but it isn't very clear. I'm not sure whether I need to have paid 12 months Self-employed PRSI in order to be eligible, or if I can use the PRSI paid during my three years of employment, even though I would be self-employed at the time of applying for maternity benefit.

Does anyone know from their own experience how this might work?

If you go on Maternity Leave in 2016, then 2015 earnings and PRSI contributions will be used by Welfare to calculate the payment due. Have a look at www.welfare.ie and do a search for Maternity Benefit. Best of luck with everything.

Lucuma

Hey I can hopefully help you, I'm self employed and successfully claimed maternity benefit in Ireland last year!

The info is here:
http://www.citizensinformation.ie/en/social_welfare/social_welfare_payments/social_welfare_payments_to_families_and_children/maternity_benefit.html

As you can see they have a section for ''if you are employed'' and a section for ''if you are self employed''.
They then have a little bit underneath that which applies to your case:

If you do not meet these PRSI conditions and you were in insurable employment before becoming self-employed, you can use your PRSI contributions (Class A, E and H) in that employment to qualify for Maternity Benefit – see PRSI conditions for employed people above.

This is saying that as a newly self-employed person, you can use the stamps you paid as an employed person to get your maternity benefit.

For both employed and self-employed they refer to the ''relevant tax year''. By default this is 2 years before you go on mat leave. So if you go on mat leave in 2016 the relevant tax year is 2014. If you paid a full year of stamps in 2014 you get the maternity benefit. You've paid the stamps for the last few years so there should be no issue there. Based on your last few years of payments you could claim mat benefit for 2016 (relevant tax yr 2014) or 2017 (relevant tax year 2015).
The only other criteria you would have to fulfill then is that you are in insurable employment up to the first day of their maternity leave. The last day of work can be within 16 weeks of the end of the week your baby is due.
This means that as a self-employed person you are paying, or are intending to pay, class S PRSI for the work that you do.
In practice depending what kind of self employed person you are, you might pay your PRSI in one go at the end of the year. In that case when you go on mat leave you haven't actually yet paid your PRSI that year, but the Dept of Social welfare will give you the mat benefit on the understanding that you intend to pay your PRSI for that year with your next tax return for the year.
This was the case with me last year. I'm registered as a sole trader paying PRSI in Ireland. I went on mat leave in August 2014 and received mat benefit, even though I didn't pay my 2014 PRSI until my accountant did my tax return in 2015. The dept of social welfare made it clear they were paying me the mat benefit on trust as it were, and would be waiting to see my tax return coming in. If for example I failed to lodge a tax return with my PRSI for 2014 paid, the Dept of Social welfare would have clawed back the mat benefit they paid me.
It could also be that as a self-employed person you will pay your PAYE and your PRSI every month on ROS.ie (online tax system) in that case you'll have your stamps paid up to date at the time you go on mat leave.

Don't forget you will get taxed on the mat benefit so even though it's ostensibly 230 a week, in reality it's less than that after you pay the tax on it! And as a self-employed you only get the Personal tax credit, you don't get the PAYE tax credit anymore.
If you've any questions just shout

catrionanic

Thanks guys, you've been extremely helpful, especially Lucuma.

holding

Lucuma can I ask do your earnings affect your maternity benefit? I am a sole trader too, but was only starting out in the last year, so didn't earn much at all. It increased as I went on, but would benefit be proportional to what you were earning?

screamer

I thought you also need to have minimum of 5k in earnings as self employed person in the year to qualify for maternity benefit as well as stamps from previous years.

holding

Thanks Screamer, I definitely have that so fingers crossed I can apply.

Senna

screamer wrote: »

I thought you also need to have minimum of 5k in earnings as self employed person in the year to qualify for maternity benefit as well as stamps from previous years.

Yes the 5k minimum is required and was a stumbling block when my wife applied for maternity benefits. First year trading can have a lot of expenses and falling under 5k can happen.

Ciarrai76

Sorry to butt in & go slightly off topic...

I'm not self employed, but help run a family business with my husband, so it feels like I am! Apart from the money side of things, I am already wondering how to manage work when I am on maternity. As it is I can't see myself being able to take the full 6 months. We don't employ many staff, and we can't really afford to take anyone on. Even if we did, I'm still worried about how the tasks I do in the business will get done. Not everything can be delegated, and my husband is going to be totally snowed under if he has to do all my jobs as well as his own.

I often wonder how self-employed women manage to have a baby and be able to take time off. It can't be easy, so any advice would be great!

Lucuma

holding wrote: »

Lucuma can I ask do your earnings affect your maternity benefit? I am a sole trader too, but was only starting out in the last year, so didn't earn much at all. It increased as I went on, but would benefit be proportional to what you were earning?

Maternity benefit used to be proportional to what you earned (up to a maximum cap) they changed it in the budget a few years ago.

Now everyone gets the same amount. No matter who you are, no matter how much you earn - everyone gets 230 a week less tax and you get that for 26 weeks.

Lucuma

Ciarrai76 wrote: »

Sorry to butt in & go slightly off topic...

I'm not self employed, but help run a family business with my husband, so it feels like I am! Apart from the money side of things, I am already wondering how to manage work when I am on maternity. As it is I can't see myself being able to take the full 6 months. We don't employ many staff, and we can't really afford to take anyone on. Even if we did, I'm still worried about how the tasks I do in the business will get done. Not everything can be delegated, and my husband is going to be totally snowed under if he has to do all my jobs as well as his own.

I often wonder how self-employed women manage to have a baby and be able to take time off. It can't be easy, so any advice would be great!

I just took 10 weeks off. I know a dentist friend of mine who was back to work after 3 or 4 weeks!
Was your husband paying PRSI stamps for you? I hope so otherwise you won't get the mat benefit. It's only 230 per week less tax but it's better than a kick in the bum!

Ciarrai76

Lucuma wrote: »

I just took 10 weeks off. I know a dentist friend of mine who was back to work after 3 or 4 weeks!
Was your husband paying PRSI stamps for you? I hope so otherwise you won't get the mat benefit. It's only 230 per week less tax but it's better than a kick in the bum!

Yes, that's side of things is fine, I'm on the payroll. I just mean in the sense of people who basically run their own business and how they manage being out for maternity leave etc.

Lucuma

Ciarrai76 wrote: »

Yes, that's side of things is fine, I'm on the payroll. I just mean in the sense of people who basically run their own business and how they manage being out for maternity leave etc.

It's definitely a struggle! And far from ideal. I had Always thought I'd be in a staffie job by the time I started having kids but it just didn't work out that way! One of the disadvantages of it for me is that my hubby puts me under pressure to get back to work (with the family finances, house etc in his mind) whereas if I was on 6 months full pay, there'd be no question of that as my mat leave wouldn't be affecting the family finances! So I don't feel ''free'' on mat leave, I feel like I'm freeloading and putting a strain on the finances. Having said that I'm well able to ignore my husband as well !!
I think you'll have to make a call based on your business. See if you can do some of the work from home, and are there systems you coudl try to put in place now to make some of the work doable from home (like admin/computer stuff). Or you could you guide him through some of the tasks in the shop using Skype even if you weren't there etc. Also don't be afraid to call on family or friends to help out

Ciarrai76

Lucuma wrote: »

It's definitely a struggle! And far from ideal. I had Always thought I'd be in a staffie job by the time I started having kids but it just didn't work out that way! One of the disadvantages of it for me is that my hubby puts me under pressure to get back to work (with the family finances, house etc in his mind) whereas if I was on 6 months full pay, there'd be no question of that as my mat leave wouldn't be affecting the family finances! So I don't feel ''free'' on mat leave, I feel like I'm freeloading and putting a strain on the finances. Having said that I'm well able to ignore my husband as well !!
I think you'll have to make a call based on your business. See if you can do some of the work from home, and are there systems you coudl try to put in place now to make some of the work doable from home (like admin/computer stuff). Or you could you guide him through some of the tasks in the shop using Skype even if you weren't there etc. Also don't be afraid to call on family or friends to help out

Thanks for your help! I do have accounts etc that can be done from home. I guess I'm just worried about whether having a new baby will affect the amount of time I'll have to do it. But I guess its about making it work. I don't want my husband to feel as though he has to take on everything at work, which will only affect home life and have him at home less. I thought at this stage we could have taken on more staff, but its not feasible, so we will have to get the staff to step up a bit more! I think some of it is letting go to and being able to delegate! I don't take after my family in that way...I tend to do things myself rather than delegate, so I guess I'll have to learn that 'skill' LOL

Fair play to any mother who runs their own business and has a family, especially if they go back to work really soon after!

holding

Ciarrai76 I own my own biz and did when I had little guy (now 2.5) and still do now I'm pregnant again. There might be a difference in that my business is mostly desk based, at home, with the odd (weekly or so) trip out and about for meetings etc. Last time I went back to work about 6-8 weeks after the birth. I had a childminder who came into my house to mind baby, and she was literally in the next room while I worked, so I could pop in and feed baby whenever he needed it. If I had to go out and about, in the early days I would bring her with me, and feed him right before going into a meeting, and right after coming back out. Later I when I got the handle on expressing (for me I didn't really succeed at expressing until the 3-4 month mark, after that I was flying with the pump), I would leave a bottle of expressed milk while I was out and about, but continue to give him milk 'straight from the tap' while I was working in the home office.

We got by okay but it was a little stressful sometimes. For me it just worked out that way as I won a big contract right before giving birth (!), plus I had only started going out on my own, so there was definite fear of missing out. 3 years on and I'm more confident at being more realistic, and I'll let clients know that I'm not available on month x or y. No need to say why if you think it will affect your relationship with them.

Ciarrai76

holding wrote: »

Ciarrai76 I own my own biz and did when I had little guy (now 2.5) and still do now I'm pregnant again. There might be a difference in that my business is mostly desk based, at home, with the odd (weekly or so) trip out and about for meetings etc. Last time I went back to work about 6-8 weeks after the birth. I had a childminder who came into my house to mind baby, and she was literally in the next room while I worked, so I could pop in and feed baby whenever he needed it. If I had to go out and about, in the early days I would bring her with me, and feed him right before going into a meeting, and right after coming back out. Later I when I got the handle on expressing (for me I didn't really succeed at expressing until the 3-4 month mark, after that I was flying with the pump), I would leave a bottle of expressed milk while I was out and about, but continue to give him milk 'straight from the tap' while I was working in the home office.

We got by okay but it was a little stressful sometimes. For me it just worked out that way as I won a big contract right before giving birth (!), plus I had only started going out on my own, so there was definite fear of missing out. 3 years on and I'm more confident at being more realistic, and I'll let clients know that I'm not available on month x or y. No need to say why if you think it will affect your relationship with them.

Its good to know its not impossible! I don't work in an office based environment, we run a shop, so its a lot more in-store work rather than office work, although I do a lot of the admin too, so at least I can still do that part! I don't mind so much being off for maternity, up to now I was really looking forward to it, but the more I think of it , the more I realise how much I do and that I don't want to have to pass everything onto my husband as he has enough to do! I don't have to deal with clients/reps, my husband does that, so at least that's not a worry. I can pop in every week to check on a few things and make sure they are done!
It'll all work out in the end!

holding

Take it a day at a time and see how it goes - you'd be amazed how much it works out and how much more able for it you are than you might have thought before. If you can separate out the business into stuff you can do from home, and stuff you can't, that would be the first step. Also if there is anywhere in or nearby the shop that a childminder might be able to have baby, or bring baby, so that you are close to him/her. Takes a bit of military planning but gets easier as time goes on.