Maternity pay for self-employed mums: New rules

A new Directive from the European Union (EU) improves the rights for self-employed women and for the first time gives women who assist their spouses the right to maternity pay.
 

The EU Directive which came into force recently has received little media focus but for many self-employed women and particularly those that assist their partners or husbands in their business it offers greater protection and importantly maternity pay.
 

Currently, women who  aren’t classed as employees but are defined as workers – such as agency workers  may be entitled to Maternity Allowance (currently £124.88 per week or 90% of your average gross weekly earnings (before tax) whichever is the smaller) which is paid for 39 weeks and can be claimed via Jobseekers Plus.

Guidance from Directgov stipulates that you can also claim Maternity Allowance if you’re employed, but not eligible for Statutory Maternity Pay, you’re registered self-employed and paying Class two National Insurance Contributions (NICs), or hold a Small Earnings Exception certificate or you have recently been employed or self-employed. You may also be eligible if you’ve been employed and/or self-employed for at least 26 weeks in your ‘test period’ (66 weeks up to and including the week before the week your baby is due.) Part weeks count as full weeks; and you earned £30 a week averaged over any 13 weeks in your test period.
 

This new Directive will give self-employed women the opportunity to take off 14 weeks as maternity leave. It will provide equivalent access to maternity leave as for employees, but on a voluntary basis. At EU level, this is the first time a maternity allowance has been granted to self-employed workers.
 

Key provisions of the directive include that self-employed women, assisting spouses and life partners of self-employed workers are granted a sufficient maternity allowance. In addition, assistant spouses and life partners of self-employed workers will have the right to social security coverage (such as pensions) on an equal basis as formal self-employed workers.
 

Member states have until 5 August 2012 to make the legislation part of their national laws.
 

Viviane Reding, EU commissioner for justice, fundamental rights and citizenship and vice-president of the European Commission said of the new Directive: "With the entry into force of this new law, Europe takes an important step forward in terms of increasing social protection and providing equal economic and social rights for self-employed men and women, and their partners.”
 

The new rules have been introduced in part to promote entrepreneurship in general and among women in particular. In Europe as a whole there is a gender gap – only 30% of entrepreneurs are women.
 

Whilst self-employment continues to be a minority the numbers are significant – 16% of the active European population work this way.
 

Around 11% of self-employed workers in Europe also rely on the help of spouses and partners who work on an informal basis in small family businesses, such as a farm or a local doctor’s practice. These assisting spouses are traditionally completely dependent on their self-employed partner. Giving them further protection recognises their role and gives them support.
 

As far as employees are concerned, the EU recently adopted a new Directive improving the right to parental leave and the Commission’s proposal for a revised Directive on maternity leave is currently in first reading by the European Parliament.
 

Whilst the new Directive improves the rights of self-employed workers in Europe the new rules do little for those already working in the UK, says Jason Gordois, an employment lawyer at Taylor Vinters who told Workingmums.co.uk: "The new EU Directive 2010/41/EU aims to promote the equal treatment of men and women who want to work on a self-employed basis.  Most notably, it entitles self-employed women, female assisting spouses and life partners of self-employed workers to at least 14 weeks’ maternity allowance.  Member states have two years, until the summer of 2012, to bring the Directive into national law.
 

“The Directive does spell out for the first time at an EU level the entitlement of self-employed women to a maternity allowance and goes some way to strengthening the protections afforded to self-employed women and to encouraging female entrepreneurship.  However in reality it is likely to have little impact on UK self-employed women, who are already eligible for up to 39 weeks’ maternity allowance. This may therefore be one of those rare occasions where the UK is already ahead of the EU."
 

Whilst a spokesperson for business lobbying group the Federation of Small Businesses (FSB) called for the provisions to be made ‘optional’ “Women that run their own business will decide how long they want to take off when they have a baby and are already entitled to support.  However, the Directive does now provide for the option of a mandatory provision to provide maternity pay for assisting spouses – those who help with the running of their partners business but receive no financial reward.  We hope that the UK Government, when implementing this Directive, will make this provision optional for those who want to make use of it.”  
 

The FSB estimates that round 300,000 people are likely to turn self-employed in the UK this year.