Family support is at the heart of economic growth

Parental pay needs a total overhaul, starting with a recognition that family support, including childcare, are basic necessities for economic growth.

man and woman's feet standing next to empty baby shoes

 

There seems to be a head of steam building about maternity pay, which, for 33 weeks at least [and more for those on Maternity Allowance] is significantly below the national minimum wage level. It went up by just 3% in April, compared to the inflation rate, currently running at 9.9%, placing new parents at an even bigger disadvantage.

I’ve been asked several times about whether more employers could step in and offer enhanced pay schemes from day one [and some already do], given that to qualify for Statutory Maternity Pay you need to have been with the same employer for at least 26 weeks and from before you got pregnant. If not, you only qualify, if you meet the eligibility criteria, for Maternity Allowance. SMP is six weeks at 90% of your normal weekly pay plus 33 weeks at £156.66 per week. Maternity Allowance is significantly less – 39 weeks at the statutory rate.

Should maternity pay [and other parental pay] be available as a day one right so that women don’t find themselves having to stay in a job they don’t want to be in in order to meet the eligibility criteria, hoping they will get pregnant quickly? If not, would offering enhanced maternity pay as a day one right be a good recruitment tool for employers? Many employers already use enhanced pay for retention reasons and several state in their enhanced maternity policy that those benefiting have to pay back the enhanced part of their pay if they don’t return for a select number of weeks.

But should it be down to employers to prop up a system that is currently not providing even a basic safety net? What is needed is a complete overhaul of parental pay, including paternity pay, with statutory pay so limited [just two weeks] and also only at the statutory rate, that most dads don’t take it. That’s not to mention all the problems with Shared Parental Leave [SPL], which continues to have very low take-up, in part due to the level of pay it offers.

Not a women’s issue

A government consultation on paternity leave and pay and SPL in 2019 seems to have gone the way of most progressive policies in the last few years, including a day one right to flexible working – quietly sidelined. More pressure needs to be put on Government when it comes to parental pay. It’s not a women’s issue – it is surely a fundamental part of any strategy for economic growth. If parents use up all their savings – if they have any – to cover any period of parental leave and then face the huge childcare bills associated with children under three they are likely to begin family life in debt. That will colour any career decisions they make. The most likely scenario is that one parent will stay at home with the child for several years, not paying tax and finding it difficult to get back to work on anything approaching the level they left it, or one or both parents will be forced to work heavily reduced hours, often relying on family for free childcare and again paying significantly less tax. Basically it’s a trap that is hindering growth.

Yet, still, parental pay and childcare are seen as issues that are not important because, given gender norms, they still affect women the most. There is a failure at the heart of government to understand what the true cost is to all of us and a failure to truly grasp whatever the concept of ‘levelling up’ is supposed to embrace. Without family support, parents often cannot climb out of debt for years, if at all. As always, it is the lowest paid who are the worst hit by all of this and who face the most difficult start to family life, given those who are on Maternity Allowance are generally the lowest paid or self employed [and often not earning much]. A review is long since due – not just because of the level of pay, but because the way the system operates now doesn’t reflect the way we work or the kind of family structures we want.



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