Work and Families Bill

moved Amendment No. 15:"Page 16, line 5, at end insert—" ““(   )   If during the period referred to in subsection (2) a woman receives a payment which qualifies as earnings but which relates to a period which exceeds the period in that subsection, the earnings which constitute that payment shall be considered as accruing from day to day and shall be apportionable in respect of time accordingly.”” The noble Baroness said: I thank the Prudential and M&G for briefing us on this. The current legislation and guidance from the Department for Work and Pensions requires employers to include annual bonuses and other payments in the calculation of statutory maternity pay. Statutory maternity pay is calculated using the eight-week period up to and including the fifteenth week before childbirth. Individuals whose annual bonus is paid within that period have it included in their calculation. Those who are paid an annual bonus outside that period do not. That results in a number of issues. First, there is an inequality between women in respect of the treatment of annual bonuses in the statutory maternity pay calculation; secondly, there is a potentially significant difference in the amount of statutory maternity pay received by individuals on identical remuneration packages; and, thirdly, there is an unnecessary cost to the Government, and therefore to the taxpayer, as a result of 92 per cent of the statutory maternity pay being reimbursed. The significance of the issues raised clearly relates to the size of the bonus payment. I know that we are talking about women on high wages, particularly in the financial services industry, but some of the bonuses paid are quite enormous. For example, someone on a basic salary of £80,000 a year would qualify for statutory maternity pay of £1,384 a week for that six-week period. However, had such a woman received a bonus of £40,000 during the relevant eight-week period, that would be included in the calculation of statutory maternity pay and she would receive £5,539 a week. Clearly that is not in the spirit of the legislation. I understand that a significant majority of the money is refunded to employers and that, as large annual bonuses are common only in certain sectors, this issue has not had widespread attention. However, the situation is plainly unfair and does not stand up to financial scrutiny. Should the proposals for statutory paternity pay mirror those currently in place for statutory maternity pay, the issue would become much wider. When debating Amendment No. 1, we talked about giving women a real choice. My noble friend Lady Miller and I had huge sympathy with what was being discussed. Some women do not receive a great deal of money and have to go back to work at a vital time when they should be bonding with their children, but here we have a wholly unintended consequence of some women earning an enormous amount of money. The amendment has been tabled to save the Government money. If the Government save money, perhaps they could consider doing other things in those early years. I have suggested for consideration an amendment to the Work and Families Bill that would require employers to include a prorated amount of bonus rather than the full amount in statutory maternity payments to women whose bonus falls within the relevant eight-week period. That would reduce the financial disparity between the maternity benefits offered to employees, reduce the cost to Government and to taxpayers and be more closely aligned with the spirit of the legislation. I beg to move.