Government Policy Paper on Benefit and Pension Rates: Will We See Any Improvement in the Workplace?

On the 27th November, the government released a new policy paper named “Proposed benefit and pension rates 2018 to 2019”. It includes new statutory rates for maternity pay, paternity pay, shared parental pay, adoption pay and sick pay that plan to be introduced in April 2018. For instance, those on maternity leave, paternity leave, or shared parental leave will be payed £4.20 more per week than they currently receive (unless 90% of their weekly earnings produces a lower figure, in which case, this is what they may expect to receive).

However, the question arises as to whether or not this increased rate will actually make a difference to individuals. Will this increase in rates improve families’ standard of living, or does it simply reflect the rate of inflation?

Furthermore, whilst the government rates seem to convey that men and women receive equal benefits, Aviva’s announcement that it will pay men and women equally for parental leave shows how the issue is not so simple. Both males and females will have the choice to take 26 weeks full pay when they go on leave to care for their children. Statutorily, men are only entitled to 2 weeks of paternity leave, or up to 52 weeks through shared parental leave if the mother has returned to work. Firstly, shared parental leave relies upon the fact that the mother has gone back to work. Men are not automatically entitled to an additional paid 26 weeks, with the further 26 unpaid, as is the case for women. Secondly, although the introduction of shared parental leave drastically improved the work-life balance for families, employers do not necessarily stick to the statute’s minimum requirements. Many employers offer women different and better options, which means families are inclined, due to economics, to have the mother provide the care-giving. This means that fathers, who would prefer to provide the care for their children, are effectively deprived of the opportunity due to monetary issues.

This week, Aviva have announced that they will be allowing parents to take a year off, with 6 months full pay, regardless of gender. The fact that this is a landmark policy within the world of employment shows how often men are excluded from the same parental leave packages as women. For instance, a woman may be given 6 months full pay, whilst a man taking additional parental leave may only be granted the statutory minimum. It is issues such as this that contribute towards the gender pay gap, as with women being offered better parental leave options, they are more likely to take a break from their career or to go into flexible working where promotion may be a less likely occurrence.

Aviva’s move has been welcomed as its policy is also “regardless of gender, sexual orientation or how they became a parent”. This means that adoptive parents, or those using a surrogate, have also had their situation improved within the company. This case shows that the statute still has not addressed many issues, as there are several groups of people who are put at an economic disadvantage should they choose to take leave. It is not complimentary to the government that it is the employer of all people (who would generally want to pay less in order to gain larger profits) who is improving such standards for their employees.

Overall, whether or not the increase of statutory rates for parental leave simply reflect the increasing cost of living, there is essentially a grave inequality between what different groups of people may expect to receive in terms of benefits. Though the statute may promote equality in its minimum rates, this does not reflect the reality of what employees of different backgrounds are receiving. Perhaps a change of law may be required so that all employers may follow the steps that Aviva have taken.

See more at The Guardian and the Government Policy Paper.