Maternity benefit as a small business owner

lolly_83

Hi folks, looking for some advice here..

I run my own small online business from home and have applied for 16 weeks Maternity Benefit from welfare for when baby is born early next year. I pretty much currently do everything business related myself but my husband will be taking over managing website sales which will have to remain ongoing while I am on maternity leave (taking the website down for 16 weeks is out of the question).

So basically while I will not be working as such during my maternity leave (just throwing a watchful eye over it), my business will continue to generate an income (as another business owner might have staff left in charge, or a partner. In this case my husband will be voluntarily helping it to tick over - I'll not be paying him - he already works FT).

Can I continue to draw an income from my business (necessary to cover creche fees for toddler etc) whilst not physically working?

In terms of tax and self assessment do I just declare all income as normal at the end of the tax year regardless of when it came in? OR will be maternity Benefit be magically withdrawn if welfare finds I have replied to a customer email or updated a product quantity on my website?

Mothers in receipt of continuing company salaries / topped up maternity Benefit continue to 'earn' while not working so can this be the same when self employed? The maternity benefit alone would not be enough for me to survive on, but with a newborn continued FT work as a business owner isn't an option either. Help!

mrawkward

I think you will find that self employed on reduced PRSI are not entitled to any such benefit payments

Stoogie

mrawkward wrote: »

I think you will find that self employed on reduced PRSI are not entitled to any such benefit payments

You are entitled to benifit but the rules are hard

mrawkward

Stoogie wrote: »

You are entitled to benifit but the rules are hard

Means tested to social welfare criteria....destitution threshold!?

Mrs OBumble

mrawkward wrote: »

Means tested to social welfare criteria....destitution threshold!?

It's a benefit, so not means tested.

I don't think you can draw income from the business while receiving MatBen. But I could be wrong.

Best you consult Welfare, or perhaps the state benefits forum.

Is there any option to draw the cash down from the business before and after the time on MB?

Senna

Maternity benefit is about the only payment available to the self-employed, you have to have paid a certain type of stamp to qualify, but AFAIK if you have earning of over 5k, you should pay that stamp anyway.
Best ask your accountant.

As for earning money while on maternity, again ask your accountant but really, I wouldn't be too worried.

mrawkward

If you are self-employed you must be in insurable employment and have:

52 weeks PRSI contributions paid at Class S in the relevant tax year. For example, if you are going on maternity leave in 2016, the relevant tax year is 2014.
Or

52 weeks PRSI contributions paid at Class S in the tax year immediately before the relevant tax year. For example, if you are going on maternity leave in 2016, the tax year immediately before the relevant tax year is 2013.
Or

52 weeks PRSI contributions paid at Class S in the tax year immediately following the relevant tax year. For example, if you are going on maternity leave in 2016, the tax year immediately following the relevant tax year is 2015.
PRSI Class S contributions for a particular year are not awarded until you have paid tax due for that year. Your income tax and PRSI liabilities (primarily for the relevant tax year) must be paid to qualify for Maternity Benefit.

If you do not meet these PRSI conditions and you were in insurable employment before becoming self-employed, you can use your PRSI contributions (Class A, E and H) in that employment to qualify for Maternity Benefit – see PRSI conditions for employed people above.

Senna

mrawkward wrote: »

.
PRSI Class S contributions for a particular year are not awarded until you have paid tax due for that year. Your income tax and PRSI liabilities (primarily for the relevant tax year) must be paid to qualify for Maternity Benefit.

My wife didn't have the s class stamp paid in the relevant tax year. She was able to get the accountant to do up a projected tax return for the current year and as that was above a certain threshold, they allowed it.
They also said that if the actual return was less than the projected, they could seek the maternity payment to be refunded.

lolly_83

Thanks mrawkward I have seen all that info on citizensinformation. I am entitled to maternity benefit as my PRSI is paid for the relevant tax year of 2015.

I am wondering what anyone else in this position has done regarding throwing an eye over their business while on leave and how any business income, which will still be coming in, is treated as regards 'insurable employment' as I will be earning (albeit massively reduced earnings) but not physically working.

Even if anyone knows the best point of contact for this advice (I don't use an accountant) without creating trouble for myself.

mrawkward

Firstly, I was ignorant of the situation regarding MB and the self employed..the old "I am a man" excuse!

The general rule is other income does not affect benefits that you are entitled to, unlike discretionary payments that are means tested.

Lots of people get some employer payment to supplement without any issue, and thus you are in the clear, they are taxed/levied on their total income including any benefits received.

Tangled

lolly_83 wrote: »

Thanks mrawkward I have seen all that info on citizensinformation. I am entitled to maternity benefit as my PRSI is paid for the relevant tax year of 2015.

I am wondering what anyone else in this position has done regarding throwing an eye over their business while on leave and how any business income, which will still be coming in, is treated as regards 'insurable employment' as I will be earning (albeit massively reduced earnings) but not physically working.

I was advised not to draw a cent for the duration of my leave, and not to be seen working in that time. Similar to you, my husband pitched in with my business when I was on maternity.

As someone else mentioned, it may be worth taking a larger drawing before your leave commences to cover your childcare costs etc.

You'll probably get more advice on pregnancy / baby forums as there will be some there going through the same, and some not for the first time.

mrawkward

Tangled wrote: »

I was advised not to draw a cent for the duration of my leave, and not to be seen working in that time. Similar to you, my husband pitched in with my business when I was on maternity.

As someone else mentioned, it may be worth taking a larger drawing before your leave commences to cover your childcare costs etc.

You'll probably get more advice on pregnancy / baby forums as there will be some there going through the same, and some not for the first time.

I would dare to suggest you were badly advised!

Immy

Of course you can continue to take your salary from the company when you are on maternity leave. You company policy is that staff are entitled to maternity leave top up.

You cannot however work during your maternity leave, however I can't imagine there is anyone outside waiting to see you log on to your website. ready to pounce. I would wonder if anyone is employed to check that women aren't working on leave.

I worked during mine, like you I had clients that occasionally needed advice etc.

Tangled

mrawkward wrote: »

I would dare to suggest you were badly advised!

You know, I'm just rethinking about this (it was a few years back!) and maybe I'm wrong on that.

I was def advised not to issue any invoices dated within my official leave time (different situation, freelance work) but my business did continue to operate. And while I was "off" I was also checking in on things, doing VAT return etc.