Source · Select Committees · Petitions Committee
Recommendation 2
2
Rejected
Paragraph: 17
As a matter of urgency the Government should consider whether Maternity Allowance should be considered...
Recommendation
As a matter of urgency the Government should consider whether Maternity Allowance should be considered as earnings in the same way as Statutory Maternity Pay and should not lead to deductions from Universal Credit.
Government Response Summary
The government rejects changing the treatment of Maternity Allowance within Universal Credit, explaining it is considered unearned income and thus deducted pound-for-pound, unlike Statutory Maternity Pay which is treated as earnings.
Paragraph Reference:
17
Government Response
Rejected
HM Government
Rejected
Universal Credit is a means tested system of support and where an individual claims Universal Credit, their award is adjusted to take account of any other financial support that the claimant is already receiving—including earnings, income and benefits. Maternity Allowance is a benefit paid by the State which is unearned income. Unearned income that is available to help meet daily living costs is taken fully into account in determining the amount of Universal Credit that an individual can be paid. As such, in determining the amount of Universal Credit that is available, Maternity Allowance is deducted pound for pound from the total value of the award. This principle applies to other benefits, for example, the same approach is applied to new style Jobseeker’s Allowance and new style Employment and Support Allowance. As such, there are currently no plans to change the way that Maternity Allowance is treated in Universal Credit. Statutory Maternity Pay (SMP) is more akin to earnings and is treated as a form of earnings in common with other statutory payments paid by employers. As a result, when adjusting the Universal Credit award, as with other earnings, SMP is subject to the work allowance and tapering rules that are built into Universal Credit. Claimants retain 37p for every pound of earnings (or more if they are entitled to a work allowance). The impact of Covid-19 on maternity and parental leave: Government Response 5