Maternity leave/pay proposals from think-tank Reform: what do you think?

[GeraldineMumsnet]

Earlier this week we got invited along to the launch of a report by Reform about maternity/paternity pay and leave.

The gist of its proposals are:

• Change current maternity pay to parental pay

• Abolish salary-related element of maternity pay and pay it at a flat rate (£5,000) for all parents

• Stop making the pay dependent on amount of time taken off work

You can read the full report here.

The report's authors are keen to get a debate going and will be following this thread to hear your reactions, comments and ideas.

Thanks,
MNHQ

Hi,

I am one of the report authors. Very interested to hear the views on our proposals. I wanted to ask a few questions to follow up as well as make a few points.

1. Time vs money

There has been some discussion of the overall concept - i.e. whether people should be paid for time off or whether they should be paid so they they can take time off. We favour the latter as it vastly reduces the amount of bureacracy in monitoring whether parents are off work or not.

It also makes it much easier to share leave between parents - otherwise someone has to aggregate the two parents leave.

I hope it also changes the mindset that this time is something that you can plan for - you know you will get a fixed amount of support - rather than the calculations required at present.

Some have suggested that women will be less likely to take longer leave. I suggest that people will take it more flexibily i.e. may go to work to catch up occassionally or do an extra shift.

1. Total amount of leave proposed

I can see that the proposal of 6 months for each parent is not universally popular! I would point out that we have suggested that this six months is flexible over the first year [ i.e. making it more compatible with breastfeeding than the current "in or out" arrangements).

However, we can keen to work on our recommendations to make them better.

If there was a total amount of leave of 12 months - how would you suggested it is split between mothers and fathers?

Also what would be the optimal amount of allowance for both in your view if longer was available?

1. Flat rating

This part of our proposals has received a lot of commentary. Our concern is that low earners currently take a lot less maternity leave than higher earners - largely because they cannot afford it. The evidence suggests that the problems are at the low income not high income end.

In fact we are proposing two weeks extra holiday pay from the employer for both parents - so actually there is only 2 weeks less non-income related pay to the employee overall.

The £5,000 is the same as the average pay given out now.

A key part of the proposal is that by flat rating the pay and paying it to families you give much more flexibility to who is taking the time off.

Employers can still offer all the existing benefits they want. We are just saying that when it comes to (tight - there is a fiscal crisis) state funding we should pay at least as much to poorer working parents as to well off ones.

No other benefit is income related any more - I am interested in knowing why people think maternity leave should be.

Best wishes,

Elizabeht Truss

Ah, Elizabeth Truss, I recognise your name! I have just been catching up with the weekend papers and you were featured in the Observer's article about 'rise of the new Tory woman'.

Reform is a right-wing think tank isn't it? Some of the proposals don't sound particularly right wing to me.

Anyway, I agree that it is the poorer parents we should be aiming to help more and a flat rate would be a good way to do that. The system as it is is incredibly unfair. Better off parents may have higher outgoings but also have greater resources to plan and save up for maternity leave.

I also think it's incredibly important that the total amount of leave should be split between mothers and fathers how they think best. The option should be there for the mother to take the full 12 months, for a 9 / 3 month split or a 6 / 6 month split. Flexibility is key. It's also worth remembering that at least one month (sometimes two or even more depending on the heath / occupation of the mother) is taken before the baby is even born.

Hello Liz.

one of the problems is as soon as you introduce this flat rate then they will stick to this as a minimum rather than enhance.

I take home 2.5k a month. i am not a mega high earner, but i do work hard and have spent many years studying to get to where i am now. on a 5k grant i would have to go back to work after 2 months. do you really think that is fair eg when someone who earns 1k a month could take 5 months?

you are just moving the problem around, to be honest.

I also will not benefit from any tax credits, whereas a 1ker would. this is an income related benefit, surely?

and i presume like maternity pay the 5 k would be taxed, so someone on 40% would end up with didly squat.

i also wonder whether or not you have done deep research into the reasons why people go back to work - its not just income - but debts, savings and desire.

that said i do think it is a good report and as ever reform are looking at real issues which actually matter to real people.

In response to your last question, SMP is a benefit paid by the government, albeit via the employer. Surely virtually all government benefits are income-related to some degree, and are aimed mostly at families on lower incomes in order to boost their income in one way or another. Families on higher incomes don't qualify for most benefits, which is of course exactly as it should be.

SMP is different in that every woman who takes maternity leave needs it regardless of her normal income, as it is an income replacement for the time she is off work, rather than an ongoing income supplement which many other benefits are.

As such, it makes sense for at least some of it to be income-related. If women on higher wages with large outgoings, especially those who are main breadwinners, don't get some of their maternity pay as income-related in some way, they will be forced back to work much more quickly.

You are going about this all wrong. If the aim is to keep both parents in the workplace (which by the way I don't agree with!) then you need to be addressing the cost of childcare, not tinkering with
maternity/paternity leave and benefits.
I have not returned to work after mat. leave because by the time I paid childcare I would be left with a pittance.

In terms of the £5K - it may be the average payout now but what would the average payout be if you calculated it on father's pay instead? Sad it may be, but men do tend to earn more than women. Parental benefit at that level would not have enabled my husband to take any more leave than he did because the disparity between it and his salary is too large.
I also think you are in a fantasy land talking about poeople overcoming lack of income with increase flexibility in the workplace (extra shifts, catch up days etc). My large blue-chip employer that boasts so loudly about work-life balance was only able to offer me a full-time role an hour away from home if I wanted to go back to work, where I had previously been working from home 3 days a week.

flowerybeanbag, much better put then my post.

Also think of unintended consequences .... hhigher paid women tend to be at higher level jobs. You would reaffirm/introduce the culture of returning to work early for higher paid/more senior women...

and conversely, the 5k carrot for having a child if you in work? hmmmm...

I agree with KingRolo, this doesn't feel very right-wing. It feels like a lot of state interference.

Yes, like alibaba says, the issue really is what happens after maternity leave.

I don't think it's the time off on maternity leave, even if it's a whole year, that holds a woman back in her career. It's not returning to work for several years or working part time afterwards that does it.

Elizabeth,

It is interesting to hear your response. How would you respond to the following specific points:

1. A leave which is specifically split between mother and father significantly and materially disadvantages the child of a single parent. By definition, that child will not have the option of being cared for by a parent for as long. It seems wrong to me that some of the most vulnerable parents in society, often with the least developed support networks, should have a net right to six months off, whereas a couple would have a year.

1. A lump sum maternity payment may force parents back to work sooner, as they can treat this payment as a 'windfall' if they go back straight away. The most disadvantaged people in society often have high debts. Can you see the pressure to use this lump sum towards those and go back to work almost immediately?

1. You are suggesting that the leave could be used flexibly over the first year. Does this not create real difficulties for employers in planning? It is going to be far more difficult to get cover for shorter or broken periods than a six/nine/12 month maternity contract.

But Missfitt - just because it was the wrong choice for you, why should that choice be taken away from everyone else? Should abortion be made illegal because some women regret it? (for the record, I think absolutely not, that's my point).

I suppose I'm unusual in that I think a child's bond with both their parents is just as important. My husband was utterly sick and miserable in his job when DS was young, while I stayed home and tore my hair out at the lack of brain-work that I could do. DH would have loved the chance to spend more time bonding with DS, and I think we as a family would have generally benefited from having the chance to choose who stayed at home. All I'm asking for is choice, and not to be dictated to because of my sex - why is that so controversial?

Depends on who your employer is. My employer pays full pay for the 9 months mat leave you can take with pay(it went up to 9 just after I started my mat leave and I got 6 months full pay)and then nothing for the remaining 3 months should you choose to take a year. So you can guess that I don't like the £5 flat rate idea! that's only 2 months gross salary for my profession.

*£5k

Oooh! didn't see page 2.

Alibaba, I'm totally with your post. I'm in the same position re childcare costs. Can't afford to go back to work.

I think for all sorts of reasons women need the choice to take maternity leave for up to a year and would like to see the financial support improved to do so. I'm very aware it makes a difference to some women's feeding and weaning decisions, but I don't think breastfeeding is the only reason for having more than 6 months maternity leave. I failed bf early on with ds1, and was very unhappy about it for a while, and had just begun to come out the other side of PND at 6/7 months, and while it was still hard it was much easier to prepare for leaving him at 10 months.

£5,000 is actually a bit more than £120 a week for 39 weeks, although the extra at the beginning means many women would lose some money, it wouldn't be that big a difference. Still, I would choose an income over my maternity leave, even a tiny one, in preference to the same amount of cash at the start as a lump sum. I think linking payment to the amount of time off, although it's not much money, does help give women a choice and a say in decision making. I think extending SMP to 39 weeks as well as making maternity leave for a year an entitlement has helped to normalise the idea that women can choose to take a bit more time off to employers. I think my misgivings are about how a change would be interpreted as much as about any proposed change itself.

I'm very conscious that I'm lucky, as a public sector worker for an employer with a good maternity leave scheme (this varies - some councils don't pay more than minimum or only a little bit more), and think I would have found it very hard to do 9 months on SMP - and after all, that's really quite a recent improvement - if my ds1 had been due just 24 days earlier than he was (ie 31 March 2007) I would have only been entitled to 26 weeks SMP.

I returned at 10 months with ds1, and will be at 9 months with ds2.

if I was a low earner and was also in the position where I desperately needed the money, I'd take the £5k and go back to work asap. I don't think flat rating the amount paid would make low earners take more time off.

Now awarding more paid leave (as in 100% paid leave) is something I'd be a fan of tbh.

We only get statutory leave here. I think, if in the year of birth, you could compel employers to up the statutory leave to 38 days (so it's currently 20 days AL plus 8 public holidays and make it 30 days AL plus 8 public holidays, with a proviso that those extra days had to be taken in the first year of life of the child - otherwise you'd get an issue with carrying them forward etc.), I would think that was a marvellous benefit.

And I think that would really benefit lower/middle income families as one of the problems we had years ago, was that we could not afford for either of us to be off work without pay (or with SMP). So if the working father could also have an additional 2 weeks off on 'baby leave' at full pay, it would have made an enormous difference to both of us.

By awarding a partner that right, it also benefits SAHMs whose husbands would be allowed 2 weeks off extra fully paid and as annual leave, I think it would be less controversial for employers.

is it being considered to increase the mat lv payments for lower paid workers without asking people on, for arguement's sake, satistafory ML give up some of the current 'benefits'. As under the schemes so far, dh and I would be worse off. when i returned to work 4 yrs ago after dd1, I came back to keep my post, keep my pension contributions and professional development as after childcare was paid what I took home was not worth coming back to work for.

after dd2, the amnt I take home after paying childcare is just about enough to say, well, at least I am bringing home something plus the above.

Dh and I would be worse off any way you cut it under any of these proposals. For perspective, We are lucky enough to get above bog standard salaries so qualify for no state support of any sort.

so yes, I agree with whoever said below that making childcare affordable for all parents, esp. lower paid ones, would benefit everyone without tinkering too much with the current system.

I'm not convinced by some of the assertions in the report - I'd guess that those of us who take most maternity leave are not the poorest or the richest women but are somewhere in the middle income wise, and have maternity pay through a scheme that pays a little bit more than SMP, including a lot of public sector workers and some for larger private companies which pay good benefits - NHS workers, civil servants, some teachers and council workers. Councils (employing teachers and all sorts of workers on varied salaries but with lots of low earners) vary enormously in how much they pay.

I'm surprised by the picture of a huge bureaucracy dealing with monitoring of maternity pay and whether women are off work. I'm really quite sceptical that that happens.

There's a lot of discussion about how cuts have to be made in the current tough economic climate. Call me cynical, but it would be a lot cheaper to pay us cash but for us to have a lot less time off - I think more low, middle and high income women would go back to work sooner, companies would save money and shorter maternity leave would be the norm again.

To respond to a few specific points:

1.HerHonesty: Under the current system you would receive £5,766.58 over 6 months because you drop down to £123 per week after the first 6 weeks. Under Reform's proposals you would receive £5,000 + two weeks paid holiday from your employer (£1,154) which is £6,154. The plus is that you could split this pay with the father. [The upshot is the current system is not generous.]

1. Alibabaandthe40nappies: Reform is a centre right non-party think tank. We are a charity and have MPs from the 3 major parties on our board. This proposal involves less state involvement than the current system which also embroils employers in claiming back the money from the government. The interesting point is that there is no upper earnings limit so regardless of how much you earn - the state is refunding 90% of your salary for the first 6 weeks.

3.Ribenaberry: Single parents benefit as they get the full £5,000 towards their leave as opposed to sharing it. I take your point about the 6 month length - that is something we are now considering.

The point about debt is a fair one - we advocate paying the £5,000 in six monthly payments to prevent it all going at once. However this proposal is all about letting parents balance their own lives better and I think we should give people more not less choice.

Stretching the leave over the year would need to be agreed with employers. I think many however would like a key staff member to be around at certain points in the year as opposed to a long absence and then total presence. We are trying to think about more flexible employment - because at the moment the keep in touch days are v. restrictive.

Best wishes,

Elizabeth Truss

Elizabeth, in my experience of finding childcare, it is completely unrealistic to expect people to be available to work at 'certain points in the year'. Unless you are lucky enough to have grandparents who live near by, or a husband who is prepared to take time of work - most aren't - finding ad hoc childcare, or part time childcare which can become full time when you return full to work is a total impossibility.

Flexible employment, ok, but in reality flexible childcare does not exist.

Elizabeth,

Thank you very much for responding to my points, and I am really pleased to hear that you are going to look into the point about single parents. Whilst doing so, can I also request that you think about non-nuclear families (e.g. who gets the leave if there is a non-resident bioligical parent and a resident step parent?).

I do still have some concerns about using the money to finance debt rather than time off, but again thank you for taking the time to respond.

but you are completely forgetting the tax issue!!!

Haven't read it but 6 months is way too low. As said most people aim for a month before birth on maternity leave so it's five months. Mine was still breastfeeding an awful lot of the time at five months.

I wanted to go back part-time. Because of the set-up where I work I had to let them know about this in the December so it could go to Steering Group and Joint Committee etc etc to start in March. If I had 6 months maternity leave I would have been beginning this process when the baby was 8 weeks old. I had to attend meetings an hours drive away.

I can't even begin to start to tell you how impossible I would have found that! And that was with a straightforward birth - I can't even think how I would have done it with a Ceasarean healing.

Also if go back at 6 months, even if part-time - you are handing over an awful lot of the introducing solids to somebody else. So people wouldn't want to do that, so they would start doing that earlier than the WHO recommendations - it's just human nature!

I could go on - but I won't!

sorry, I've not read all the comments, but my initial thought so it are:

1. There seems to be a liot of emphasis on low wage earners and high wage earners, but what about those of us in the middle? I am in a situation where if I was to go back to work, all my salary would be paid out on childcare. As DH is also a middle earner, we don't qualify for any help towards the cost of childcare. All his slary is taken up with mortgage and bills etc leaving us very little left over, disposable income. Where is my incentive to return to the workplace when I would effectively be working to pay someone else to raise my children?

1. As someone with a take home pay of previously aroubd £2000, £5000 for a whole year is a substantial drop in income. As one of the comments at the beginning of the thread said, you structure your outgoings around your income, with higher mortgages etc. For most of my peer group, it was only the six week at 90% of salary that made a longer leave viable as you can budget with that.

1. I would prefer to see maternity pay, as a whole index linked to salaries....so you get x% (whatever that might work out at) for the whole of your leave. That makes it a hell of a lot more of an attractive porposition to everyone. The way this report couches it, I can't see it doing any middle/high wage earning women any favours, and don't understand how it will lead to better equality in the workplace. AS some comments said, not all men want to take the time off. I think it is also saying that because men and women would be off the same amount of time, then there would be no discrimination as everyone would be on the same footing. It doesn't address the fact that even whem maternity leave was only 18 weeks (as it was when I had my DS 8 years ago) there was still that inequality, so length of time off isn't a factor imo. also, will it not just increase the discrimination to fathers as well as mothers? sharing discrimination isn't the answer; it needs to be banished completely.

1. It also doesn't address non nuclear family units. What about women bringing up babies on their own? or who have an abusive expartner who although still has parental rights and may want to insist on using their "half" of the leave, the mother might not want him having that much of an input? There has to be an opt out of taking six months each.

1. Six months each only pays lip service to breastfeeding and will, imo, do more damage to BFing rates. The WHO recommend exlcusive BFing to six months and then up to two years complemented with other foods. This will further reinforce the incporrect message that it is BF till six months, use fromula from then on. By giving mothers a year off, that allows them to BF to a year, and they can probably then continue to BF night and morning for as long as needed. Swapping to mixed feeding before the baby is six months(again someone said women will be going back before the baby is six months if they have had some time off before the birth) may jeopardise the BFing relationship for many women. If you want to stop at six months or mix feed, then fine, but what about those women who want to BF exclusively?

so....although I agree that there should be longer paid paternity leave for men, if they want it, it should not be at the expense of the mother who is, lets not forget, getting that time off for her body to recover from the pregnancy and birth and for nourishing her baby in the best way for both of them.

Elizabeth, thank you for replying. Don't you think that's right though, that there should at least be a salary related section to maternity leave? I was not an especially high earner so this is not self interest. Someone said above, that lots of benefits are salary linked. Tax credits are essentially a means tested benefit, I think that removing the income link of maternity benefit would end up penalising a lot of people who are just above the tax credit threhold, middle earners, and have very little impact on those who really are on high salaries.

I stand by my earlier point that until the problem of affordable, flexible childcare is fixed then it doesn't matter what happens with maternity/paternity benefit, hundreds of women will have to remain out of the workforce when they would rather not.

LackaDAISYcal - I totally agree with your points 1,2 and 3.

litztickle, you make the point that your recommendations are for 6 months spread over the year, which would be more compatible with breastfeeding than 6 months flat.

However I would be interested to know how you propose to implement this and what effect it would have on employers and the people who cover maternity leave?

Most roles involve the appointment of a maternity cover - at the moment the prospect of a possible 12 months continuous service is reasonably enticing and doesn't require much of a premium over regular pay. A max of 6 months be considerably less enticing to someone considering maternity cover - particularly if it might be interrupted by the previous person coming back and forth.

How would it work if the mother had the right to return and depart throughout the year? Would this right have to be negotiated with the employer in which case who would have the overriding decision? Would it not result in a lip-service situation like the flexible working rights at the moment, and would it not make recruitment of maternity cover much more difficult and less secure for the person on the contract?

I'd be interested to know if you have done any research on this aspect of the recommendations.