Wealthier mothers paid more maternity leave

Parental leave arrangements in Britain are unfair on poor families and out of touch with the modern workplace, a new report says.

The study by the independent think tank Reform also states that fathers are ‘treated as an irrelevance’ and government maternity pay is much more generous for rich mothers than poor.

In the report called “Productive parents”, Reform has recommended a complete change in the way parental leave and pay is allocated. It declares current arrangements for parental leave are short-changing the families that need it most.

Reform also found that those who are professionals and managers can rely on their more generous employers for help and can afford more time off, whereas those in casual and low skilled jobs receive the least pay and take the least maternity leave. 

A mother who earns £50,000 per year and takes six months leave will receive nearly £8,000 from the taxpayer, compared with one earning the minimum wage (£12,000 per year) will receive only £4,500.

Elizabeth Truss, Deputy Director of Reform, said: “There is something wrong with a system when mothers on high incomes and gold-plated maternity leave also get most money from the taxpayer.”

The report recommends all working families receive £5,000 over six months for a fairer and more flexible system. Reform says this change will not cost taxpayers any more money.

According to Reform, British fathers are “invisible men” with few rights to parental leave.  Those at Reform maintain the report shows that families are stronger and fathers more likely to read to their children if they take paternity leave. It also points out that nearly every other developed country provides greater fairness between mothers and fathers.

The report raises the “unfairness” of the tax and benefit system. Maternity pay is seen as a critical example by Reform; it maintains the majority of the £2 billion provided to help at the start of a child’s life is given to higher earners.

Patrick Nolan, Chief Economist of Reform, believes the changes the report suggests would improve Britain’s work productivity. He said: “Britain’s basic economic problem is low productivity and current family policy is a key reason for that.  More flexible arrangements will help skilled parents keep in touch with the workplace and aid pace to the economic recovery.”

The report recommends:

1. Turning maternity pay into a flat rate “parental payment” of £5,000, payable monthly and shared between the mother and the father.  That equates to £192 per week, compared to the current basic statutory maternity pay of £123 per week.

2. Providing six months of unpaid leave to each of the mother and the father, during the first year of a child’s life, to be taken at the same time or one after the other.

3. Giving the parental payment regardless of the length of leave taken. 

4. As a result, greatly reducing the burden on employers by removing the need to administer maternity pay. 

5. Abolishing “gimmick” programmes such as the health in pregnancy grant, the healthy start scheme and the employer supported childcare schemes, saving £275 million per year. 

6. Reforming flexible working regulation to make it easier to introduce. 

7. Reducing regulation on childcare provision.
 
8. Accelerating reform of education, skills, health and welfare provision in order to help unemployed parents keep in touch with employment.

Currently, mothers can claim statutory maternity pay after continuous employment with a company of 26 weeks. A mother will receive 90 per cent of her average weekly salary for the first six weeks, the rate then drops to £123.06 per week, for a maximum of 33 weeks.

Although fathers are permitted two weeks' paid leave post-birth, mothers can take a year off in total.

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