Can HMRC advance your care agency's maternity pay before payday?
Yes, it can. HMRC will pay you the statutory maternity pay in advance when your agency genuinely cannot afford to fund it from its own cash. This matters for care providers more than for most employers, because a domiciliary agency often carries a heavy payroll against money that arrives weeks later from councils and the NHS, so a single carer's maternity pay landing in a tight month can tip the run into the red.
The money is not a grant and it is not extra. It is simply the statutory pay you were going to recover anyway, paid to you earlier so the carer is not left waiting and your other wages are not squeezed. You still run the payment through payroll, and you still account for it on your returns. If you want the mechanics checked for a specific carer, our care agency accounting team and payroll and PAYE service do this as part of the monthly run.
Before the advance, though, two things decide how much you are dealing with: how much the maternity pay comes to, and how much of it you get back. Get those straight first, because the amount you ask HMRC to advance depends on them.
How much is statutory maternity pay, and how much is the agency really out of pocket?
Statutory maternity pay is paid for up to 39 weeks, in two parts. For the first six weeks the carer gets 90% of her average weekly earnings with no cap. For the remaining 33 weeks she gets the lower of a flat weekly rate or 90% of her average weekly earnings. For the 2026 to 2027 tax year that flat rate is £194.32 a week, as confirmed in the HMRC rates and thresholds for 2026 to 2027.
To qualify, the carer needs average weekly earnings at or above the Lower Earnings Limit, which is £129 a week for 2026 to 2027, and 26 weeks of continuous service with you by the qualifying week, which is the fifteenth week before the week the baby is due. Most permanent carers clear both tests comfortably; it is bank and zero-hours staff where the average earnings figure needs a proper look.
Here is the part owners feel. On a full-time carer earning around £520 a week, the first six weeks at 90% come to roughly £468 each, then 33 weeks at £194.32. Across the leave that is close to £9,200 of pay leaving your bank before any of it comes back. You recover most of it, but the timing is the problem: you pay first, you reclaim later, and in between the cash is gone.
How much of the maternity pay can a care agency reclaim from HMRC?
You reclaim either 92% or 109% of the statutory maternity pay, and which one you get turns on a single number. Most employers recover 92% of the statutory pay they hand out. A small employer, defined as one whose total Class 1 National Insurance was £45,000 or less in the last complete tax year before the qualifying week, recovers 109%. That extra slice is there to cover the employer National Insurance you pay on the maternity pay itself, so a small employer can end up slightly ahead rather than out of pocket.
The catch for care agencies is that the £45,000 test counts both employer and employee National Insurance, and you ignore reliefs such as the Employment Allowance when you measure it. An agency with 15 or more carers on today's wage rates often sits above £45,000, which means it recovers 92%, not the 109% small employers get. It is worth checking your own figure each year rather than assuming, because crossing that line quietly changes what every statutory payment costs you, as set out in the 2026 to 2027 employer rates (as at October 2026).
On the roughly £9,200 of maternity pay above, a 92% employer recovers about £8,460 and carries the balance; a small employer recovers about £10,000, a little more than it paid out. Either way, the recovery lands through your payroll reporting, not as a separate cheque, which is where the timing question comes back in.
What if the agency cannot afford to pay the maternity pay up front?
Then you apply to HMRC to be paid in advance, rather than borrowing or holding back other wages. The rule is straightforward: if you cannot afford to make the statutory payment, HMRC will fund it in advance, and you apply using the online statutory pay funding form. The decision for you is simply whether this month's cash covers the payment or not.
What LOYALS advises care clients is simple: if the maternity payment will leave you short for the rest of the payroll run, apply for the advance as soon as the leave dates are known, because it costs nothing and protects every other wage in the run. The one case where we say pay it and reclaim the normal way is when the month's own cash covers it comfortably, since there is no point adding an application you do not need. The condition that flips the advice is cash, not the size of the agency.
How do you apply, and when does the money arrive?
You apply up to four weeks before the first payment is due, and HMRC may send back an application that arrives earlier than that, so the timing is worked from the carer's expected week of childbirth, not from the day the payroll looks short. This is the funding method in practice, and it doubles as the checklist we work through for a care client.
- Fix the dates first. Take the carer's expected week of childbirth, find the qualifying week, and set the date the first statutory payment is due. The four-week window counts back from there.
- Work out the pay, not the payroll. Calculate only the statutory maternity pay due in the period you are funding. The advance is the statutory pay you are entitled to recover, never your whole wage bill.
- Take off what you can already offset. HMRC uses any statutory recovery that is more than the tax and National Insurance you owe that month to reduce the advance, so only the genuine shortfall is funded.
- Apply online with the right references. You will need your PAYE and Accounts Office references, the carer's name and National Insurance number, the leave dates, the amount you are entitled to recover and the amount you want advanced, plus the agency's bank details.
- Reconcile on the Employer Payment Summary. Send an Employer Payment Summary for each pay period so the advance and the recovery line up, and settle any small balance by that month's normal payment date.
One warning worth repeating: giving incorrect information on the application can lead to a penalty of up to £3,000 per employee for each tax year, so the figures and dates have to be right first time.
| Question | Reclaim the normal way | Apply for an advance |
|---|---|---|
| When the cash reaches you | After you have paid the carer, through the EPS | Before payday, up to four weeks early |
| Who you pay the carer | The agency, from its own funds first | The agency, from the HMRC advance |
| Best when | The month's cash covers the payment | The payment would leave the run short |
| What you reclaim | 92% or 109% on the EPS | Same recovery, just funded earlier |
Where do care agencies get this wrong?
The commonest mistake is asking HMRC to advance too much. Owners under cash pressure reach for the whole wage bill, when the advance is only the statutory maternity pay you are entitled to recover, less anything you can already set against that month's tax and National Insurance. Fund the shortfall, not the payroll, and the claim is clean.
The second is assuming the 109% small employer rate applies. On current wage rates an agency with 15 or more carers has usually passed the £45,000 Class 1 National Insurance line, so it recovers 92% and should budget for the roughly 8% it carries on each statutory payment. Checking which side of the line you are on, once a year, is a five-minute job that changes your cash planning for maternity, paternity and sick pay alike.
The third is leaving it late. Because you can only apply four weeks out and HMRC bounces anything earlier, the window is narrow, and a carer's leave rarely lands on a convenient month. Putting the due date in the payroll calendar the moment it is known is what keeps the application on time and the wage run whole.
What to do next
Put the carer's due date in your payroll calendar the moment you know it, confirm which recovery rate your agency is on this year, and decide whether the month's cash covers the pay or whether you will apply for the advance. Those three moves, made early, turn a maternity payment from a cash scare into a routine line in the run.
If you would rather not hold all of that yourself, the quickest step is to let our payroll and PAYE team calculate the statutory pay advance and prepare the funding request, so HMRC's money reaches you before payday. LOYALS is a King's Cross firm of accountants and business consultants that runs care agency payroll, statutory pay recovery and HMRC funding applications for domiciliary and supported living providers across London, and we would rather set the advance up in good time than rescue a short wage run at the last minute.
If you would rather this sat with someone who does it every week, that is what a specialist care agency accountant is for. We handle statutory pay, funding applications and the councils-and-NHS cash cycle together, because in domiciliary care they are the same problem. You can see how we support providers on our care agency accountants page.