Category Archives: Maternity & Paternity Pay

Unfrozen: a hollow victory for new parents?

In this guest post, Abi Wood of NCT argues that the Government has to do more for new parents than simply exempt maternity and parental pay from its benefits freeze.

Politicians usually love to talk about families, and their commitment to supporting them. After all, who isn’t in favour of motherhood and apple pie? But, unusually, there wasn’t a single mention of working families in last week’s Queen’s Speech.

Rumours had been circulating about where the £12 billion of cuts in welfare spending would fall, causing concern that they could hit new parents by reducing benefits such as statutory maternity and paternity pay. So you might expect charities that support new parents, such as NCT, to be relieved by the news that, while the rates of most working-age benefits will indeed be frozen for two years from 2016-17 under the Full Employment & Welfare Benefits Bill, statutory maternity, paternity, shared parental leave and adoption pay will be exempted.

But this simply isn’t good enough. Parents taking time away from work to raise the next generation currently receive a shockingly low £138 per week in statutory parental pay. That is almost £100 less than they would receive if they were working full-time on the minimum wage. And anyone who’s spent time with a baby knows that looking after them takes more than 40 hours a week.

On top of this, maternity and paternity pay has been losing value for the last few years. Since 2013, annual increases have been capped at one per cent, rather than going up in line with inflation. Research commissioned by NCT from the think-tank IPPR revealed that, as a result of this cap on annual increases, parents receive £224 less over their maternity or paternity leave. The study also showed that this cut hits the poorest fifth of families hardest.

Decently paid parental leave is vital to enable new mothers to recover from birth, and to enable both mothers and fathers to take time away from the workplace to bond and care for their new baby. The struggle to make ends meet increases the strain on families and can force parents to return to work before they are ready. One new mother told us: “I’m currently on leave but only able to take 14 weeks off as statutory pay is just not enough for me to pay the bills. This has affected everything, particularly not being able to breastfeed for as long as I would have liked to.”

So, while the Government might be expecting a positive reaction from the family sector for exempting maternity and parental pay from the freeze, they’re going to have to do a lot better than that. NCT will be campaigning for changes to help new parents, and we hope that next year’s Queen’s Speech will have some genuinely good news for them.

Abi Wood is Public Affairs Manager at NCT.
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1500 nappies: NCT reveals cost of the parent penalty

By Richard Dunstan, Policy & Parliamentary Campaigns Officer

A few weeks ago, this blog highlighted the ludicrously low level of statutory maternity and paternity pay, compared to the national minimum wage, the Living Wage, or average earnings.  Yet just how new parents are supposed to get by on less than 60 per cent of the minimum wage – at a time when their outgoings have gone through the roof – is not a question you are likely to have heard any politician address recently.

Well, today NCT has had a go at trying to change that, with a great little report – based on some number-crunching by think tank IPPR – demonstrating the detrimental impact on family incomes of the Government’s decision to limit the annual uprating of statutory maternity and paternity pay to one per cent, rather than the inflation rate, in each of the three financial years from April 2013.

As this neat NCT infographic shows, by 2015 parents will effectively lose out by £224 over their full period of parental leave.  And this ‘parent penalty’ could have paid for 1,500 nappies, a year’s supply of sleep suits, or two months’ energy bills.parentPenaltyInfoGraphic

Ahead of this week’s Budget, NCT is calling on the Government to “end this parent penalty and increase maternity and paternity pay in line with the cost of living”.

Hear hear to that.  However, as the Valuing Maternity campaign has highlighted, the ‘parent penalty’ actually extends well beyond the cap on the annual uprating of statutory maternity and paternity pay. The campaign notes that the abolition of some benefits – such as the £190 Health in Pregnancy grant – and real-terms reductions in others, including the freeze on Child Benefit, has cost women and their families up to £3,000 since 2010. (If you are pregnant or a new mother in work or on maternity leave, you can use the campaign’s Cutbacks Calculator to see just how much you’ve lost).

What’s more, in the words of employers surveyed by the Department for Business, Innovation & Skills (BIS), in a report published earlier this month, statutory maternity and paternity pay is simply not “a liveable wage”.  And it is “immoral and damaging to society to force new mothers back into work before they [are] ready”. Hear hear to that.

So, in our ‘families & work’ manifesto for 2015, we are likely to call for a series of annual, real-terms increases in the level of statutory maternity and paternity pay, so as to raise it, over time, to at least the national minimum wage.  Sure, that would carry a price tag. But seen as investment in Britain’s human capital – and, more specifically, in family health, child development, maternal employment, and gender equality – we believe it is a price well worth paying.

Getting the lowdown on maternity & paternity pay

By Richard Dunstan, Policy & Parliamentary Campaigns Officer, Working Families

Last week I sat in on a meeting held by the shadow minister for women & equalities, Sharon Hodgson MP, with a group of leading employers, to discuss best practice on supporting  new mothers and maximising maternal retention rates.  As Ms Hodgson notes in her report of the meeting “these are employers who know that supporting new parents isn’t just good for families, it’s good for business too; they recognise the importance and value of attracting and retaining talented women in their organisation, and have developed innovative, flexible and genuinely progressive approaches which others can and should learn from.”

However, if  the principal purpose of the meeting was to identify potential ways in which a future government could do more to support new mothers and their employers, the message from the employers present was surprisingly prosaic: increase the level of statutory maternity (and paternity) pay.

As one employer noted forcefully, at £136.78 per week, statutory maternity and paternity pay  equates to just 58 per cent of the adult National Minimum Wage (£236.63 for a 37.5-hour week, at £6.31 per hour).  It also equates to just 48 per cent of the Living Wage (£286.88 for 35-hour week, at £7.65 per hour outside London), and a mere 26 per cent of the median gross weekly earnings of full-time employees (£517 in April 2013).   Getting by on such a low income is challenging at the best of times, but is especially hard when bearing all the additional costs that come with parenthood.  So it’s easy to see that a hike in statutory maternity and paternity pay might well be more beneficial to struggling families than any eye-catching legal reform of the kind politicians tend to look for when writing their election manifestos.

Unfortunately, politicians of all parties are unlikely to have much appetite for any such hike in statutory maternity and paternity pay – at least for the foreseeable future.  All the main parties are signed up to achieving a budget surplus by 2018-19 and, as the Institute for Fiscal Studies reminded us today, as of April this year only 40 per cent of the necessary (and planned) budget cuts will be in place.  The Government has already capped the annual uprating of statutory maternity and paternity pay at one per cent, and a cap on overall social security spending from 2015 could even lead to cuts.

Yet statutory maternity and paternity pay (including maternity allowance) accounts for just 1.6 per cent of the total annual spend on social security, and at £2.75 billion per year is just a fraction of the sum spent subsidising landlords through housing benefit (£24.3 billion). And whilst the level at which it is paid remains so low relative to wages, the prospects for take-up by fathers of statutory shared parental leave – set to replace the existing system of statutory maternity and additional paternity leave from April 2015 – must be bleak.  For £136.78 per week equates to 30 per cent of the median gross weekly earnings of women (£459), but only 25 per cent of the median gross weekly earnings of men (£556).   And if take-up by the minority of fathers who will qualify is low, the cultural shift to shared parenting that all political parties say they want to engender will be glacially slow.

So, are there any politicians out there prepared to forego eye-catching ‘new ideas’ on parental rights at work in favour of pushing real cultural change with a bit of old-fashioned spending?  Time will tell but, if we find any, we’ll be sure to let you know.

In the meantime, please do use the comment button below to tell us what you think!