Government scheme offers money to the self-employed during the coronavirus crisis but Liverpool-based The Women’s Organisation says new mothers are being short-changed. Tony McDonough reports
A Government support scheme that gives a cash lifeline to self-employed people during the coronavirus crisis is penalising new mothers, it is claimed today.
Unveiled in March by Chancellor Rishi Sunak, the Self Employment Income Support scheme offers money to the self-employed based on 80% of average profits over the last three years.
However, Liverpool social enterprise, The Women’s Organisation, points out that a woman taking maternity leave within the assessment period would typically have lower profits, pulling down the average calculation and leaving her out of pocket.
It adds that entrepreneurs who are mothers, who typically take longer parental leave than their male counterparts, are being unfairly impacted by having taken time out from trading to look after their new-borns.
While official government guidance states that self-employed people who have taken, or are currently on, parental leave “may” still be eligible for the scheme – as HMRC considers them to be still trading – these entrepreneurs are receiving grants significantly lower than had they not taken this leave.
The Women’s Organisation has estimated that this could potentially impact around 80,000 self-employed women in the UK who took leave during this time.
Maggie O’Carroll, chief executive of The Women’s Organisation, said: “When queried about this failure in Government we heard The Chancellor Rishi Sunak say that the system was fair in ensuring that people who had a “volatile year” would get the opportunity to use an average calculation. Let us be clear. Taking maternity leave is not a bad business year. It is time away from trading to care for a baby.”
The Women’s Organisation is calling for the Chancellor to allow mothers to work out their average profits without having to include maternity leave in the calculation. One viable way of regulating this would be for the Government to look at who claimed Maternity Allowance.
One of the entrepreneurs affected is Merseyside entrepreneur and founder of Good Taste Magazine, Jade Wright. She said: “I am one of thousands of women who have been disadvantaged by taking maternity leave.
“My grant has been effectively cut in half because the maternity leave I took three years ago wasn’t taken into account in the calculation. Even though I returned to work in 2018 and have since earned a normal amount, I have lost more than 50% of my grant because I made a loss on my self-employed pay during my first year in the assessment period.
“Women often take on the role of primary care givers, even beyond maternity leave countless women take additional leave every year to look after family members, and this all impacts on the amount they will receive.
“This is an example of structural discrimination which disproportionately penalises women and more must be done protect and encourage more female entrepreneurs.”