UK Paid Maternity Leave Scheme
The UK has had a national scheme of Government-funded paid maternity leave for nearly 30 years. Since 1994, it has been progressively improved and expanded – initially to comply with the European Union Pregnant Workers Directive and the EU Equal Treatment Directive and more recently as part of the UK Government’s policy to increase women’s participation and retention in the labour market and to support working parents. 1
Paid maternity leave is available to nearly all working women (95%) and is subject to some basic preconditions. To qualify for statutory maternity pay (SMP), a woman must have worked for her current employer for a minimum period of 26 weeks, and earn above the minimum earnings level for paying national insurance.2 As from 1st April 2007, female employees who meet these criteria (which is most of them) are entitled to 39 weeks of paid maternity leave, with the first six weeks paid at 90% of the employee’s usual earnings and the remainder at a fixed or flat rate. The flat rate for maternity pay has doubled in the last 10 years, up from £55.70 in 1997 to £112.75 a week since April 2007.3 SMP is regarded as earnings and subject to tax. Working women who do not qualify for SMP are entitled to Maternity Allowance. Many employers top up the flat rate to earnings replacement level for at least some of the extended leave period. Unpaid maternity leave is not subject to any conditions except the requirement to give notice to the employer.
SMP is paid as wages or salary by the employer. Employers recover 92% of the SMP they have paid from HM Revenue and Customs (HMRC) by making an equivalent deduction from their national insurance contributions. Small employers, defined with regard to the size of their wages bill, are entitled to recover the full amount of SMP that they have paid, plus 5.5% to compensate them for any additional costs. If paying SMP will cause cash flow problems for the employer, then the employer can claim the money in advance. An HMRC Employer Helpline is provided for this and other queries or concerns.4
Detailed information and guidance on eligibility, entitlements and procedures is also available to employees and employers on a Government-provided website called Tiger - Tailored Interactive Guidance on Employment Rights, now part of the Directgov service
Since 1979, the UK Government has commissioned a series of surveys to evaluate the impact of statutory maternity rights on mothers and their employers. They have found that the single most important factor explaining the length of maternity leave taken by women is the duration of her maternity pay.5 They also show that only 1% of employers overall report difficulties with complying with the legislation and implementing these entitlements. 6
It is also worth noting that employees in the UK have a right to reasonable paid time off to attend ante-natal appointments – this is in addition to other leave entitlements. 7
Statutory Paternity leave and two weeks Statutory Paternity Pay were introduced in April 2003. The Government has signalled its intention to extend paid maternity leave to a full year, with some portion of it transferable to fathers. 8
1. See for example Work & Parents: Competitiveness and Choice, Green Paper, 2000, The Stationary Office, England. ↩
2. Earning before tax an average of £87.00 a week. This is called the Lower Earnings Limit for National Insurance Contributions (NI) and is the amount an employee has to earn to qualify for a range of benefits. You have to earn more than this amount before you actually start paying NI. ↩
3. Women who usually earn less than this flat rate receive earnings replacement. ↩
4. Employees and employers have to pay National Insurance Contributions on earnings. ↩
5. See the most recent report, which is on employees, All these surveys have been carried out by the Policy Studies Institute www.psi.org.uk ↩
6. Maternity Rights and Benefits in Britain 1996, Callender, Millward, Lissenburgh and Forth, DSS Research Series, No 76, The Stationary Office, London. ↩
7. WorkSmart - Know your rights, Maternity leave and pay ↩
8. See the Women and Work Commission Interim Statement, 2005 For a comprehensive policy program to achieve equality at work for women see Towards a Fairer Future, 2006 ↩
Jenny Earle
Canberra
6 July 2007