Self-employed mothers have threatened to sue Chancellor Rishi Sunak and the Government for discriminating against women when providing income support to freelancers during the coronavirus crisis.
Pregnant Then Screwed, a campaign group, said 70,000 women have been unfairly left with less under the scheme, after their maternity leave was counted against them. The lawyers helping them bring the case said the scheme violated equality laws, including the European Convention on Human Rights.
They wrote to HM Treasury on Friday saying they would bring a legal claim if the system was not reformed, giving the Chancellor seven days to respond.
The state aid scheme allows struggling freelancers to claim grants of up to £7,500 to cover up to 80pc of normal earnings for incomes lost between March and June. The payouts are based on average profits over the past three years, but do not discount maternity leave, meaning women who have taken time off to have children since April 2016 are left significantly worse off.
The maximum amount a self-employed mother can claim while on maternity leave is £151.20 a week for up to 39 weeks in statutory maternity allowance. Those who have not paid enough class 2 National Insurance contributions will receive just £27 a week.
More than 40pc of the nation’s five million self-employed people have dependent children. Around 600,000 are women, more than a third of whom work full-time, according to the Office for National Statistics.
Last month one self-employed mother from Guildford said her maternity leave meant she received £2,000 less than her husband, even though both worked similar hours as driving instructors.
Calls to reform the system have so far failed to bring about change. However, on Tuesday night the Chancellor said employees returning from parental leave could be furloughed by their employer even after the cut-off date for new applicants to the Coronavirus Job Retention Scheme, which subsidises 80pc of employees’ wages up to £2,500 a month and is running until the end of October.
Joeli Brearley, of Pregnant Then Screwed, said the Chancellor had chosen to ignore freelancers and failed to consider the disproportionately negative impact on vulnerable new mothers when announcing the self-employed scheme in March.
“Rishi Sunak has been questioned on this in Parliament, but he continues to ignore the problem. We have spoken to so many women about this topic, they are angry, they are in financial hardship and they are struggling to understand why they aren’t being listened to,” she said.
The Chancellor recently announced the scheme would be extended, allowing freelancers still getting by on reduced incomes to claim a second round of grants in August. The new grants will provide self-employed workers with up to 70pc of their average profits to cover a further three months of lost income, up to £6,570, but maternity leave taken in the last three years will still be factored in to the calculations.
A total of 2.6 million people have made use of the state aid on offer so far, claiming £7.5bn in support.
Anna Dews of Leigh Day Solicitors, which is helping campaigners to bring their legal challenge, alongside barristers Doughty Street Chambers, said: “The Covid-19 pandemic is a public health crisis that affects everyone. Its impact, however, is not equal. Our existing health and socioeconomic inequalities mean women in particular are bearing the brunt of this health emergency in many different ways. The financial support package put in place by the Government must not add to this negative impact.”
A Government spokesman said the income support scheme was among the most generous in the world and that the Government understood the challenges new parents who are self employed face. They insisted that calculating grants based on average profits over the past three years helped to better reflect the typical incomes of those using the scheme.