Back in 2015, the government introduced new rules that would allow parents to share their leave following the birth or adoption of their child. The idea was that Shared Parental Leave (SPL) and Statutory Shared Parental Pay (ShPP) would allow parents more flexibility and make it easier for both parents to share childcare.
We're breaking it down for you so you can understand how it will affect you and your family's finances to help you make the most informed decision.
With normal maternity leave, the mother must take the first two weeks off after having a baby under statutory maternity leave. After that, they're entitled to 52 weeks of maternity leave. The mother's partner is entitled to up to 2 weeks of paternity leave.
But with Shared Parental Leave (SPL), after the statutory 2 weeks, the mother and their partner can share the remaining leave if they wish. SPL is applicable for married, co-habiting and same-sex couples, as well as couples adopting. You may also be eligible for up to 37 weeks of Statutory Shared Parental Pay (ShPP) after having a baby.
Here's how it works:
After the initial 2 weeks, if you decide to split childcare the mother can end her statutory maternity leave early so that the rest of the time is taken as Shared Parental Leave. As a couple, you can then share the rest of the leave between you. You can share up to 50 weeks of leave.
You can decide how you use the leave. You can take it together, take it in turns, or you can take it in blocks, returning to work in between each stint of leave. Each parent can take up to three individual periods of leave in your baby’s first year. But you must inform your employer of your plans to take time off at least eight weeks before.
As an example, you could share responsibility for the first month or two by taking time off together. You can then split time off after this initial period, and even take another block of shared leave again. Or the mother can go back to work while their partner looks after the baby, without them having to take an extended period of leave from their job.
What do you and your partner receive?
Shared Parental Pay is 90% of your salary or £145.18 a week, whichever is lower, for up to 37 weeks. If one parent is taking leave, you will receive one payment, and if both are off work, you receive two.
On the other hand, Statutory Maternity Pay is 90% of the mother's salary, with no restrictions, in the first 6 weeks. It then drops to the same as ShPP - £145.18 or 90% of your average weekly earnings (whichever is lower) for the next 33 weeks.
You're entitled to use your statutory maternity pay and leave before you switch to Shared Parental Leave. If you earn over £145.18 per week, you could be left out of pocket if you end your maternity leave and switch to SPL before the first 6 weeks of statutory maternity pay are up.
Here's an example...
We know, it's pretty complicated so here's a full example based on average UK salaries (£30,528 for men and £25,241 for women):
Let's say the mother uses her statutory maternity leave for the first 28 weeks (half her maternity leave). In this time the family would get...
- £437 per week from the mother's salary (90% of £25,241) for the first 6 weeks = £2,622
- The payments to the mother then drop to £145.18 per week for the next 22 weeks = £3,194
- In these 28 weeks, the father is receiving his normal salary at £587 per week = £16,436
After this, the family decides to swap to Shared Parental Leave so that the mother can go back to work, while the father stays at home. The family has 24 more weeks of SPL and 11 weeks of ShPP. This would work out as...
- The father on leave would receive £145.18 per week for the 11 week period = £1,597
- After this, the leave becomes unpaid for the final 13 weeks = £0
- The mother is back at full pay for the final 24 week period, in this example that would be £485 per week = £11,640
In this example, the total earnings of the family over the year would be £35,489 (before tax).
What this means for you and your family
While you might take home more money with Statutory Leave, SPL offers greater flexibility. It allows you to take care of your baby at the same time beyond the first two weeks, or mix and match your leave in different ways. For instance, if the mother decides to go back to work after three months her partner can stay at home without having to quit their job. So it really depends on your own personal situation and preferences.
And remember, this is just the statutory policy - many employers offer more attractive parental leave policies so it’s worth really getting to grips with what your company offers.