Employers to bear the brunt of maternity benefit cuts
Published 17/10/2013 | 04:00
EMPLOYERS and new mothers will both be hit by cuts to state maternity benefit next year.
The Government announced in the Budget that it is to introduce a standard maternity benefit payment of €230, which will result in the State paying €30m less to new mothers.
However, thousands of employers who pay top-up payments to their employees when they go on maternity leave are also likely to take a financial hit for the change.
And business lobby group IBEC warned that some companies may have to review their maternity benefits as a result. Top-up payments to bring salaries up to normal levels during maternity leave are standard practice in most large companies, although most women working in small businesses do not receive them.
The cut in the state payment by €32 a week from the current top rate of €262 means many companies will now have to pay more to bring employees' salary up to their existing levels – though this could vary depending on contract terms.
IBEC head of HR development Mary Connaughton said that the change could cost a typical large employer with 12 employees on maternity leave an extra €10,000 a year. "This will have an effect on employers and many will have to review their maternity benefits," she said.
The Irish Small and Medium Enterprises Association said their surveys showed a quarter of small and medium-sized businesses paid maternity benefit top-ups, whereas 75pc of large companies did so.
Social Protection Minister Joan Burton admitted that it was her decision to cut maternity benefit but said payments were "significantly more for a longer period of time than most other European countries".
"I made my final recommendations, but I made it in the context of having looked at what's paid in other countries," she told Newstalk radio.