A group of self-employed mothers has launched legal proceedings against Rishi Sunak, the Chancellor, for indirect sex discrimination after more than 85,000 pregnant women and new mothers have lost out under the “unlawful” Self-Employment Income Support Scheme.
They have accused the Government of undermining the importance of maternity leave by treating it the same as taking a holiday or sick leave when calculating the grant due under the coronavirus support package.
Wages are based on 80pc of average profits over three years, meaning that many mothers of young children will automatically get less than men who earn the same income because it includes the period of lower pay during their maternity leave.
Campaign group Pregnant Then Screwed, with support from law firms Doughty Street Chambers and Leigh Day, have called on the Government to make immediate changes to the SEISS so that time taken for maternity leave is discounted when average earnings are calculated.
Anna Dews, of law firm Leigh Day Solicitors, said: “For decades, legislators and the Courts have recognised that women require specific protection during periods of maternity leave.
“Despite that, the Chancellor has repeatedly failed to acknowledge the discrimination that is being caused by the way in which the SEISS is currently being implemented.”
On July 2, the Government rewrote the rules of the scheme so that freelance mothers who were left with less state aid because they took time off to have children during the 2018-19 tax year could now claim what they are owed.
However, the new rules only apply to 2018-19. Anyone who took maternity leave in the two tax years prior could still end up with less, as their lower earnings from the time will dilute their average profits when calculated over three years.
The policy was changed after the campaign group said it would sue the Government for discrimination and violations of the European Convention of Human Rights if the “unfair” quirk in the system affecting an estimated 70,000 women was not plugged.
Campaigners said this did not fix the problem for an estimated 86,640 women despite the Government admitting there was an issue with the method of calculation. They have argued that the new rules should be extended to anyone who has taken time off to have children in the past three years.
The state aid scheme allows struggling freelancers to claim grants of up to £7,500 to cover up to 80pc of normal earnings for income lost between March and June.
The maximum amount a self-employed mother can claim while on maternity leave is £151.20 a week.
Joeli Brearley, of Pregnant Then Screwed, said the Government’s legal standpoint that maternity leave is the same as any other leave sets a “very dangerous precedent”.
She said: “Giving birth and raising the next generation is not an illness, it is critical work for a well-functioning society. Both men and women get sick and go on holiday, only women take maternity leave.”
One self-employed mother from Guildford, who wrote to this newspaper, said her maternity leave meant she had received £2,000 less than her husband, even though both worked similar hours as driving instructors.
A spokesman from HM Treasury said they understood the challenges for new parents who were self-employed but that the scheme calculated the grant on a three-year average of profit to ensure it better reflected their income.
They added that the Self Employment Income Support Scheme was “one of the most generous in the world” and has helped more than 2.7 million people so far.
Freelancers still getting by on reduced incomes can 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.