PARLIAMENTARY WRITTEN QUESTION
Maternity Allowance and Maternity Pay: Universal Credit (4 May 2020)

Statutory Maternity Pay is paid by an employer and is considered to be earned income, which can be taxed. Maternity Allowance is a tax-free allowance and is not considered to be earned income.

Maternity Allowance is paid by the state to people who are not eligible for statutory maternity pay but who do meet the eligibility criteria for the allowance. The rate varies according to the criteria fulfilled which principally covers employed people who have worked less than the time before they become eligible for Statutory Maternity Pay, self-employed people and people out of work.

It is a longstanding principle of the welfare system that benefits are not paid to claimants with income available from other sources to support themselves. Unearned income, which is provided to meet everyday living costs, is taken into account in the calculation of UC and their benefit entitlement may be adjusted accordingly.