Executive summary

  • There is currently a disparity in the amount of money employees receive when they are pregnant as compared to the self-employed. We believe this is unfair and entitlement should be the same regardless of employment status.
  • If you are an employee you are eligible for “Statutory Maternity Pay”. This is set at 90% of average weekly earnings for six weeks, and then drops to £138.18 for 33 weeks.
  • If you are self-employed, you may be eligible for “Maternity Allowance”, not “Statutory Maternity Pay”. In this case you will receive £138.18. for 39 weeks.
  • 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% of their earnings for this period.
  • This is unfair. The self-employed should also receive 90% of their average earnings for six weeks.
  • With growing numbers of self-employed, it makes no sense to punish those who choose to work in this way. Simplifying the system would bring clarity to self-employed mothers.
  • The state already indirectly pays this benefit to employees (employers pay SMP and claim this back from the Government), why not to the self-employed?
  • The government should also radically re-examine how the self-employed are treated for paternity benefits
  • By doing so the government could benefit from simplifying the system, exceeding the EU requirements regarding labour law and ensuring the economy maintains the innovative influence of the self-employed
  • The Government has already committed to reviewing maternity pay for the self-employed as part of its review of self-employment. IPSE will be responding to this review.

IPSE’s maternity pay policy

  • Implement a form of Self-Employed Maternity Pay
    • This would match the rate of employees’ Statutory Maternity Pay which is 90% of average weekly earnings for six weeks
    • This should be calculated based upon the earnings over the prior 2 years and averaged in weeks to ensure a representative amount is paid
    • It should also be dependent upon sufficient National Insurance contributions having been made in the past 2 years
    • It should be paid directly to a self-employed mother for the first six weeks
    • Then they would receive the normal £131.18 a week for the remaining 33 weeks, in the same way maternity allowance is currently paid
    • The government should also clarify and improve paternity rights for self-employed fathers
  • How will it help?
    • With growing numbers of the self-employed, it makes no sense to punish those who choose to work in this way
    • Simplifying the system would bring clarity and fairness to self-employed mothers

How will the government benefit?

  • Greater simplicity
    • Our proposals would be simple to implement as they rely on the existing benefits framework and would only require minimal legislative change
    • The complexities of Statutory Maternity Pay, which requires employers to claim money back from the government via HMRC, are avoided
    • Instead Maternity Allowance for the self-employed would be revamped and replaced
  • Global leadership in rights for self-employed
    • Our proposals also ensure that the UK will meet and exceed the requirements of the EU Directive on self-employed workers and assisting spouses (2010/41/EU)
    • This means that the UK will become a world leader in providing labour rights for self-employed women
  • Maintain innovative economy
    • Support will ensure that the self-employed can continue to deliver their benefits to the UK economy
    • Those that work flexibly are essential innovation-driven economy like the UK – without sacrificing protections for vulnerable workers

How will IPSE achieve success?

  1. IPSE will work with the Department of Business, Innovation and Skills to finalise a system that works for self-employed parents
  2. IPSE will respond to the Government’s self-employment review, making the case for a new form of Statutory Maternity Pay for the self-employed.
  3. IPSE will continue to monitor the number of self-employed mothers, highlighting any hardships they face and bring these to the attention of the government
  4. IPSE will monitor the implementation of any changes to the maternity and paternity benefits system to ensure that it serves its purpose