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HMRC internal manual

Employment Income Manual

Social security benefits: statutory maternity pay: summary

Part 10 Chapter 3 ITEPA 2003

Statutory maternity pay (SMP) is a measure of earnings replacement paid by employers 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:

  • an earnings related payment currently 90% of her normal weekly pay over a certain period for the first six weeks
  • a standard rate payment for the following 33 weeks.

Employers are responsible for administering the scheme and paying their employees the amount to which they are entitled. HMRC is responsible for ensuring that employers correctly administer the scheme and for providing employers with the funding to which they are entitled.

Any enquiries about entitlement to SMP should be dealt with initially at the local HMRC office or by the Employers’ Helpline. If an employee is disputing her employer’s decision that she is not entitled to SMP or the amount she is being paid, she should be referred to the Statutory Payments Dispute Team in Benton Park View, Newcastle.

SMP is taxable

SMP is not a social security benefit but replacement earnings charged to tax as employment income.

An employer is still required to pay SMP even if the employment ceases. Also, If an employer fails or refuses to pay SMP, HMRC will pay SMP direct to the claimant, but without operating PAYE (EP1015 tells you how to deal with these cases- assume this reference is correct). Where payments of SMP are not paid by the employer, for example if HMRC pay them because the employer is insolvent, Section 660 ITEPA 2003 ensures that the payments are charged to tax as social security income.

National Insurance contributions are payable on SMP.

Use of the abbreviation SMP

The abbreviation SMP is used in DWP literature and certain PAYE, National Insurance and Statutory Payment 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).