Maternity Benefit - Partial Top Up

Hi there,
I am due to go on maternity leave in October and have a number of questions regarding maternity benefits.

My gross annual salary is €41k. I am entitled to the state maternity benefit and in addition my employer will top up these payments to 2/3 of my monthly pay. However, they are going to defer 1/3 of their contribution until I return to work! Complicated policy…

So basically I’m trying to figure out
Any guidance you can offer would be greatly appreciated. Don’t know where to start!

1- when you say that your employer will top you up to 2/3 of your salary but defer 1/3 of that, do you mean you will be, initially topped up to 1/3 of your salary or that your employer will work out how much the top up will cost them and then hold back on 1/3 of that? Also, will the maternity benefit be paid to you directly or to your employer?
2 - As you will be earning over the standard rate band amount in both years and tax works on a cumulative basis, there is no benefit in deferring the payment of the lum sum.
3 - yes your tax credits continue to build up during unpaid leave (as do your holiday leave entitlements).
4 - As you both earn over 32,800 are are likely to do so again next year, there is no benefit to going with joint assessment. However, if you were to take enough unpaid leave so that you earned less than 32,800 next year (including your maternity benefit payments) then joint assessment would be better.

1) Top-ups can be calculated in a few ways, I would suggest that you ask your HR department to confirm what your gross monthly pay will be during Mat Leave and what the lump sum will be.
2) If you take 6 months Mat Leave from Oct, your leave will end in March, If you take some unpaid, you will probably still be back during the same tax year, so you will possibly get one really large paypacket, but the unused tax credits will all be used at that time,

If were leaving in June and due back in Feb, then it would be different, as you might have unused tax credits which therefore would not be used as you would be getting the lump sum in a new tax year.

4) there should be no difference in the total tax paid, unless you take loads of unpaid leave and you end up with unused trax credits.

If you opt to be jointly assessed, you will have more income while on Mat Leave as your husband can use more of your tax credits, but you will be taxed more on the lump sum.

Thank you both for yor help.

It sounds like there is no disadvantage to us being jointly assesed (if anything it will be better from a cashflow perspective) and in the event that I take unpaid time and end up earning less than €32800 gross then my husband could use my tax credits.

Nige, my employer is going to hold back 1/3 of their contribution only, so 1/3 of the top up amount. The stste benefit will be paid directly to my employer.

Huskerdu, I will take your advice and ask HR to break down what I will be paid... no harm for me to know what to expect before asking them though

By my calculations (which assume you have full tax credits and standard rate band and aren't making pension contributions from your gross salary and will get the full €262 per week maternity benefit), then your employer's weekly top up will be about €176 a week which with your benefit gives €438 gross income a week. Income tax will be about €24.60, PRSI will be NIL and USC will be about €12. This will give you a net weekly income of €401 or a monthly payment of €1,737.

That's great, thanks Nige!