Parental Benefits

The self-employed cite flexibility, freedom and independence as the most common drivers for choosing this line of work. These features can be particularly appealing to new parents – one in seven of all freelancers are working mothers, and between 2008 and 2015 the number of mothers working as freelancers increased by 70%.

However, parents who choose to have children when they are self-employed are at a significant disadvantage compared to employees. There is no reason why self-employed parents should receive less support, as parental benefits are funded by the state, not employers.

Existing policies place the entire burden of childcare on mothers and deny fathers the right to bond with their children. IPSE believes the following discrepancies should be removed, so that parents have equal opportunities to care for their children.

Enable mothers who are self-employed to claim statutory maternity pay

Much less support is available from the state for self-employed women, compared to employees. For example, if you are an employee you are eligible for Statutory Maternity Pay (SMP). This is set at 90% of average weekly earnings for six weeks, and then drops to £138.18 for 33 weeks. SMP is paid by your employer, who then claims this back from the Government.

However, if you are self-employed, you may be eligible for “Maternity Allowance”, not “Statutory Maternity Pay”.  In this case you will receive only £138.18 for 39 weeks, there is no period where you will receive an amount proportionate to your earnings.This means there is a six-week period in which the self-employed will receive much less than an employee, as unlike employees they do not receive 90% per cent of their earnings for this period.

The self-employed should also receive 90% of their average earnings for six weeks. This should be based on the last two years of self-employed earnings and subject to sufficient National Insurance contributions having been made.

Extend paternity leave to the self-employed

Statutory Paternity Leave is the time you can take off to support your partner. If you're an employee, you're entitled to either one or two weeks of paid paternity leave. Fathers who are self-employed are not entitled to any paternity or parental pay. This discrepancy needs to be removed to allow self-employed fathers time to bond with their child.

Give self-employed parents access to Shared Parental Leave (SPL)

SPL was introduced in April 2015 to give fathers more time to bond with their children, and to ease expectations on mothers. However, the self-employed have been excluded from this right.

SPL allows up to 50 weeks of leave - 37 weeks of which is paid – to be shared by parents if they meet certain eligibility criteria. Parents can take leave in their child's first year at different times, or double up by taking leave at the same time. Statutory Shared Parental Pay (ShPP) is £139.58 a week or 90% of an employee's average weekly earnings, whichever is lower.

Eligibility for SPL should be extended to the self-employed. There It is estimated that this regulatory change would be essentially cost-neutral, as it would merely mean sharing an existing allowance between two people.

We set out our policy recommendations on maternity pay for self-employed women in our Taylor Review response.

IPSE’s work on the APPG for Women and Work

In addition to our work on maternity pay, IPSE is also keen to hear other issues facing self-employed women in work. We sponsor and are an active member of the APPG for Women and Work to develop progressive policies to hold Government to account and support the growing numbers of self-employed women and mothers. You can see there Annual Report 2016 below.