Maternity leave potentially disadvantaging self-employed women under the Self-Employment Income Support Scheme

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04 May, 2020

Rosalind Leahy

An article published earlier today by the BBC highlights the difficulties for the Government and businesses in applying the emergency measures put in place to financially support individuals whose income and ability to work has been affected by Covid-19 restrictions.

The article (which can be accessed on the BBC website here - considers the impact that periods of maternity leave taken by self-employed women will have on the amount of financial support they can claim through the Government's Self-Employment Income Support Scheme (SEISS). Under the scheme, self employed people can claim 80% of their average profits up to the value of £2,500 for three months. The average is calculated with reference to the last three years of tax returns, and maternity leave taken in this time is not discounted. As a result, the period of time away from work on maternity leave will reduce the average profits over the assessment period and consequently potentially reduce the amount of financial support received by women.

Self-employed confidence coach Lucy Baker found that when the coronavirus hit, her work suddenly had to stop and she will need to claim under the scheme. "When you knuckle down to the details, it's pretty disappointing," she says. "It feels like something they just haven't thought of, and I feel like I'm being penalised for having time off to have a baby."

On a closer examination of the mechanics of the scheme, it becomes clear that there is an additional level of potential discrimination. Given the fact that the scheme restricts the maximum amount that be claimed to £2,500, the effect of periods of maternity leave on the amount claimed by higher earners can be negated by the cap. If the average profits are high enough, they will be in a position to claim the maximum amount of support irrespective of the reduction in profits resulting from the leave. This will not be the case for lower earners whose average is around or below the cap. Arguably, lower earners are affected more than higher earners, introducing the potential also for a socio-economic disadvantage.

This demonstrates the importance of discrimination and equal rights discourse even during such extreme conditions. Such schemes have been put in place in order to mitigate the negative effect of restrictions. Whilst such discourse may seem churlish to some at the current time, and perhaps not an urgent and essential consideration in the midst of such unprecedented circumstances, if the scheme does not operate in a fair manner, and certain groups of individuals aren't afforded protection, the efficacy of the scheme is undermined and lacks legitimacy. It also brings to the forefront consideration of the intricacies of indirect discrimination and how unintended structural practices can result in a detriment to groups of individuals. Given the time pressures involved in the introduction of the array of economical protection schemes, it is understandable that unforeseen problems arise when the measures are put into operation. Many other hurdles have already arisen and been addressed by the government, so it is entirely feasible that this issue will also be addressed. We await a response from the Government.

Both direct and indirect discrimination is also a potential pitfall for employers when implementing the Job Retention Scheme and furloughing staff, and perhaps changing employment terms, or working patterns and hours to accommodate business needs. If such changes are implemented in a way that detrimentally affects a group of individuals protected under the Equality Act 2010 it could potentially amount to discrimination giving rise to a tribunal claim. Employers should exercise caution when selecting which members of staff will be affected and should take legal advice if there are any concerns.

For more information contact Rosalind Leahy in our Employment & HR department via email or phone on 01772 220185. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

Learn more about our Employment & HR department here

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