# Pension Contributions on Maternity Benefit



## Lin83 (11 Mar 2013)

Hi, 

I'm looking for some advice on this. I have emailed the pensions board but they haven't got back to me yet. 
I am PS so if I go on maternity leave I get maternity benefit and my salary topped up. The maternity benefit is paid by DSP, to my employer and they pass it on to me. At the moment, pension contributions and levy are calculated on the maternity benefit amount + the top up. 
The pensions handbook says that contributions should be operated on "pensionable remuneration" and this is defined as "basic salary plus pensionable allowances". It is my understanding from reading this, that pension contributions should not be operated on maternity benefit, as it is not pensionable remuneration. 
26 weeks maternity leave are reckonable for pension purposes, I understand this and I understand this is why contributions are deducted from *salary*, but I cannot see why they should be deducted from MB. 
Can anyone advise on this? Salaries section said they don't have time to read the legislation and that that's the way it's always been done in all departments .. therefore it must be right ..


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## oysterman (11 Mar 2013)

Lin83 said:


> It is my understanding from reading this, that pension contributions should not be operated on maternity benefit, as it is not pensionable remuneration.


Be careful of what you wish for:

To follow the logic of your argument the top-up isn't pensionable remuneration either since it is not payment for work done. And the 26 weeks leave should neither count as service for incremental purposes nor as part of the reckonable service on which your pension will ultimately be calculated.

Since maternity benefit and the top-up are being characterised in the logic of your argument as an insurance-type payment (rather than salary) given the principal that the recipient of an insurance payout should never be over-compensated, the net payment to you while on maternity leave should be no greater than what you would receive in normal service i.e. you should not receive what would normally have been deducted at source as pension contributions AND you should not be credited with that service for incremental or pension purposes.

Leave well enough alone; the PS treatment of maternity leave is very generous as it is.


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## Lin83 (11 Mar 2013)

Thanks for the response but I don't think you understand what I mean. The top up payment is salary, the 262 mb isn't. This is not about whether ps pensions are generous or not, it's about whether something is being treated correctly or not. 
26 weeks maternity leave are protected in law as counting for pension and incremental purposes, this is completely separate and does not only apply to ps. 
PRSI, USC and , until July this year, tax are not operated on the mb payment how is it treated as not being salary for those purposes but it is for pensions.


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## JoeRoberts (11 Mar 2013)

Your pension rights are protected in law but you still have to pay for them.


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## Lin83 (11 Mar 2013)

Yes I know I still have to pay for them - but should they be paid on a social welfare payment. I know they apply to the salary part of payment and that's fine - but is it right to apply contributions to mb.


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## JoeRoberts (11 Mar 2013)

Yes, certainly does for private DB pensions anyway. There is a piece of legislation around somewhere for it.
Think about it logically, your pension rights are not being reduced, so why should your payments ?


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## Lin83 (11 Mar 2013)

I am thinking logically by looking at the legislation - mb is not pensionable remuneration. 
What happens in the situation where the mother chooses to have the mb paid directly to her by DSP - in this case she receives the mb weekly and her employer be it public or private, pays the top up amount ( yea I know not all private sector get full pay) anyway in this case the contributions are based are on top up only. An employee would have to pay extra to maintain the same level of contribution, but ps pensions are based on service. What I pay now, over 30 years from retirement has no bearing on what I will receive when I retire, once I have full service. The 26 weeks are counted as service, not what I pay. 
I thought I might get some advice on the legislation here, or a pointer to something relevant but I'll just see what the pensions board say.


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## JoeRoberts (11 Mar 2013)

Lin83 said:


> anyway in this case the contributions are based are on top up only. .


 

Not the case with a private sector DB pension.
Whether or not the employer pays a topup, the full missed contributions are collected when the employee returns.
Anyway, rules may be different with PS.


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## Clints (18 Aug 2014)

Hi lin83
Like you I am thinking of this logically. I am currently asked my employer to look at the legislation to see if maternity benefit is pensionable. I am in the public sector and I am trying to get my head around how it could be pensionable. I am wondering if yo got any further on in your search for an answer. Thanks


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