Why should self-employed mothers get less?

This was first posted as part of our fortnightly 'Freelancing in Focus' LinkedIn Newsletter. Subscribe today for the latest opinions and updates from our team.

For too long, lower maternity pay and the burden of childcare costs have hindered freelance mothers.

Many women choose to enter self-employment for overwhelmingly positive reasons. Among the most significant are greater control over working hours (63% of women said this was a factor), choice of where to work (56%) and better work-life balance (55%) – all features that could be particularly appealing to new mothers or those planning for the future.

Yet, discrepancies in the way that maternity pay is distributed between the employed and the self-employed and exorbitant childcare costs are hindering freelance mothers, deterring women considering self-employment and ultimately preventing mothers from returning to the labour market.

With 276,000 freelance mothers already benefiting from the freedom and flexibility that self-employment affords, is it not time for government to embrace this dynamic group?

The current system for Maternity Allowance unfairly results in self-employed mothers receiving less than their employee counterparts, who are able to claim Maternity Pay.

Presently, employed mothers can claim 90 per cent of their average weekly earnings (before tax) for the first six weeks whereas self-employed mothers are unable to benefit from this initial payment.

On the face of it, there seems little justification for such a blatant discrepancy between the employed and the self-employed.

This is not a tax issue. These self-employed mothers will have paid Class 2 National Insurance for a minimum of 13 of the 66 weeks prior to their due date in order to meet the eligibility for Maternity Allowance. When National Insurance ultimately covers state benefits such as support with pregnancy, why should self-employed mothers receive less maternity pay than employee counterparts?

For freelance mothers, a payment equivalent to 90 per cent of one and a half months pay can represent a significant amount. And when women are subject to the ‘Motherhood Penalty’ – earning up to 45 per cent less than those who do not have children – government must remove this additional financial penalty for being self-employed and ensure maternity pay parity in the first six weeks.

Exorbitant childcare costs and inflexible nursery hours are preventing both self-employed and employed parents from returning to the labour market.

I, myself, know the sheer cost of childcare and understand the burden placed on working households. I’m not surprised to see that the average parent earning median wage in England is paying on average 65 per cent of their take-home pay for full-time nursery care for a child under the age of two. Not exactly an incentive to get back into work…

Whilst self-employment affords flexibility and allows freelance parents to work around childcare arrangements, rising childcare costs are deterring many parents from returning to work. In fact, a recent survey of 1,000 parents with children under four revealed that 70 per cent would work more if childcare were available for free.

Childcare costs should not be acting as a barrier to mothers – who we know are more likely to be the primary carer – wishing to return to work, especially if the government is serious about tackling the growing problem of the economically inactive.

At IPSE, we’re campaigning for Maternity Allowance to be brought in line with Statutory Maternity Pay so that freelance mothers can benefit from the initial six-week payment. Similarly, whilst we expect the Chancellor to announce additional childcare support at the budget next week, we want to see low-cost childcare provided for both employed and self-employed parents and ultimately encourage mothers to return to the labour market.

Are you self-employed or going to become self-employed, and do you have a new arrival on the way? If so, we are pleased to announce that all parents who are on maternity, paternity and adoption leave are entitled to receive 60% off the first 6 months of their IPSE membership - including existing members.

To claim your discount, please contact us via [email protected].