This is the question from one of my client,
She is currently employed and will be going on maternity leave. Her husband owns a business and to compensate for the reduced income in the coming year, he wants to add her as a shareholder in his company.
Would that mean that her Statutory maternity pay and benefits would go down, because she ll be getting dividends from her husbands business?
Any help will be highly appreciated
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To answer the immediate question, qualifying for SMP solely depends on the circumstances of the specific employment. If she is receiving other benefits, then that will depend on what they are and who is paying them.
But I think the husband's accountant should really be consulted on this. Making the wife a shareholder, especially if only to address a temporary drop in income, has a number of pitfalls associated with it. Their specific circumstances and future plans are likely to be relevant.
No impact
Her other income has no impact on her employer's obligation to pay her SMP.
It could have been arranged better with some forward planning. If her husband's company had employed her since before she became pregnant and paid her a good salary just for the relevant period (23 to 15 weeks before the baby is due), she could have got SMP from her husband's company as well, which would have cost his company nothing.