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Maternity Pay and Universal Credit

November 2019

Univeral Credit (UC) is a means tested benefit which helps families on low or zero income. UC takes into account your household income, whether or not you pay rent, where you live, whether or not you have a partner, how many children you have and what savings you have.

Here is a guide to check whether or not you are likely to qualify for UC during your maternity leave. It doesn’t matter if you are normally on a high salary, because your household income is checked each month and applies to every month when your income is low:

If you are renting a property, find your rent-free income by taking your rent off your total monthly take-home pay including maternity pay. Non-renters should use your total monthly take-home pay as income. If this income is less than about £1200 in any one month, apply for UC. If you have more than one child, apply for UC if your total monthly income is less than about £1500. Families who don’t rent may qualify for UC if their income is less than about £1900 a month. The amount of UC payable will vary with your income, the less you earn, the more UC you will get.

Check out your precise entitlement by using the Universal Credit Calculator or get personalised help by visiting your local Citizens’ Advice.

If someone in your family has a disability you may be able to earn more than these levels and get UC. However, UC is not payable if your total savings are more than £16000. For savings between £6000 and £15999, a deduction of about £45 a month is made to your UC for each £1000 savings you have over £6000.

Here are two case studies of new mums, Bethany and Susie, who got UC while on maternity leave:

30 year old Bethany from Worthing is expecting her second child and lives with her husband Ollie in a 2 bedroomed flat which costs £685/month. Ollie earns £1800 a month after deductions. At first Bethany gets Company Maternity Pay and they can manage on their income until Bethany’s pay drops to Statutory Maternity Pay at £151.20 per week. They claim Universal Credit and get £333 per month. For the last 3 months of Bethany’s leave she gets no pay but their Universal Credit rises to £739 a month. Total Universal Credit claimed: £4215

25 year old Susie from Glasgow is expecting her first child and lives rent free with her parents. For the first month of her leave she gets £1600, for the second month she gets £1052, for months 3 to 9 she gets £151.20 per week and nothing for the final 3 months. Susie claims Universal Credit and gets nothing for the first month, £503 for the second month, £461 for months 3 to 9 and £549 for each of the final 3 months. Total Universal Credit claimed : £5377

These families then went on to boost their savings using the government’s “help to save” scheme. Find out more about how you could boost your savings by up to £2400.