A few years ago, before embarking on the parenthood journey myself, I had a conversation with my brother in law about the cost of having children and, whilst it massively pains me to admit this, he was totally right. The thing is, everyone tells you having children is expensive and yes that is true, but it’s the loss — or at least reduction of income — that’s the real stinger. Unless you’re one of the lucky few that had a good chunk of disposable income before pregnancy, or you’re sensible enough to be a super savvy saver, you’ll need to make some changes. Neither of these scenarios applied to me so, like many others, my husband and I found ourselves with all the same bills to pay, an extra person to sustain and significantly less money coming in.
First time around it was less of an issue; I was employed full time as an HR Manager so had a good understanding of my rights before, during and after maternity leave and my employer had a decent maternity package which, if I’m honest, I took for granted. Its only now, with the benefit of hindsight, that I realise how lucky I was. Not only did I get a decent financial package, my employer was incredibly supportive of me throughout, including approving a flexible working request early on so I knew I would be going back part time after maternity leave. This took the pressure off both financially and emotionally, allowed us to arrange childcare well in advance and gave us the opportunity to budget everything properly (I love a good spreadsheet). However, for various different reasons working part time wasn’t for me and so, by the time baby number two was on the way, my situation had changed and I was no longer gainfully employed but working for myself.
With my background in HR and a sister who had been self-employed for years, I knew what I was entitled to, how to apply and where to look for more information, but this got me thinking about other self-employed parents-to-be. I mean, most self-employed people are unlikely to have written themselves a nifty little staff handbook with a range of employee policies (but if you have, amazing work, well done you!) So, if you don’t have an HR background, or friends that can point you in the right direction — what do you do?
By reading about other people’s experiences before knowing your own situation, you risk scaring yourself shitless or building your hopes up if what you read doesn’t apply to you.
You will find a whole heap of information on the net; in various forums, blogs and on pregnancy sites and by all means read it all, but my advice is start with the facts and then look to the forums for tips — how you can save money, where the best deals are for buying baby bits, the best sites for buying and selling pre-loved baby gear etc. What you are entitled to when you don’t work or are self-employed varies and policies change; by reading about other people’s experiences before knowing your own situation, you risk scaring yourself shitless or building your hopes up if what you read doesn’t apply to you.
My first stop for anything relating to benefits is www.gov.uk — it’s always best to get the information straight from the horse’s mouth, even if you end up looking for translations elsewhere. Here you will (hopefully) find everything you need to know about maternity allowance and eligibility, but in a nutshell: it’s all about national insurance contributions and dates, basically making sure you’ve paid enough in the weeks leading up to your due date.
There are different rates of MA, ranging from £139 per week for 39 weeks to £27 per week for 14 weeks; this is all outlined on the website with clear eligibility criteria. However, if you’re uncertain where you stand and can’t easily find out (e.g. from your accountant), the claim form is straightforward and the Department for Work and Pensions will check if you’ve paid enough when you submit your claim and let you know if you haven’t.
If you are entitled to MA then you do need to consider what this means for your business before going ahead though as there are rules about working whilst receiving MA and unfortunately they’re not particularly favourable to those trying to maintain a business.
The work you can do without it affecting your MA is limited to ten ‘keep in touch days’ or ‘KIT days’ for short. Any work you do (even just checking a few emails) and any period worked in a day (even just half an hour!) counts as a whole day so if, like me, you find it hard to switch off and checking emails is a habit that’s hard to break, ten days is not going to last you long. If you do go over your ten days, then your case may be evaluated by Job Centre Plus to determine a reasonable period of disqualification for the ‘extra’ work undertaken.
In addition to KIT days you may hear people refer to SPLIT days (shared parental leave in touch days). Unfortunately, these aren’t applicable if you’re self-employed as you won’t be eligible for shared parental leave. However, an employed partner may be able to access shared parental leave and pay based on the employment and earnings test – again, you can find more information on this on the www.gov.uk.
It’s clear that there is a huge amount to be done before self-employed parents are afforded the same, or even close to the same rights as employed parents, but I live in hope that things will change.
If maintaining your business using KIT days alone isn’t an option there are a couple of alternatives you can look at, however both are more complicated and have potential repercussions so do your research and seek legal advice — I don’t have personal experience of these options so am not advocating either one, just letting you know that the options exist!
Partnership — assuming you’re currently working as a sole trader, changing your business to a partnership could be a viable option to keep things going whilst you enjoy some time off with your new little person. Perhaps you have a friend or partner that could run the business for you. Just make sure you agree what will happen beyond your maternity leave.
Become an Employer — employing someone to run your business during your period of leave may be a good option. However, becoming an employer does come with additional responsibilities so as well as considering the financial side you need to also think about how the time commitment of having an employee will eat into your KIT days (plus the additional stress if this isn’t something you’re accustomed to).
If you aren’t eligible for MA you need to get in touch with your local Job Centre Plus as you may be eligible for Employment and Support Allowance (ESA) (formerly Incapacity Benefit) and I would also suggest visiting www.acas.org.uk and www.maternityaction.org.uk. Both offer free help and advice and in my humble opinion are worth their weight in gold.
Obviously, it’s not just self-employed mums that become parents, dads do too. Unfortunately, the news here is short and not very sweet so there’s no point trying to dress it up — regardless of whether you pay NI, or how long you’ve paid it, you are not entitled to statutory paternity pay. And this absolutely sucks. The same applies for parents that are adopting (although watch this space as there is talk of this changing with the introduction of an MA equivalent).
It’s clear that there is a huge amount to be done before self-employed parents are afforded the same, or even close to the same rights as employed parents, but I live in hope that things will change, because they really need to.
Photograph by Amy Williams.