The Education Broker is only provider of Staff Absence Insurance & Maternity Leave Insurance preferred by the NAHT & approved by NASBM. MATERNITY LEAVE & MATERNITY LEAVE INSURANCE – WHY ALL THE FUSS? Neville Mort, Head of Education

MANAGING THE COST OF MATERNITY LEAVE The driver: New DfE directive from 01/04/2013 –If you weren’t already receiving a budget for maternity leave from your LA you now do (compulsory) –What’s happened since? Some School Forums de-delegated it Some SFs did not de-delegate it Some LAs were happy to receive it back Some LAs did not want it back So what’s now right for your school? Do you feel fully equipped to make the best decision?

MANAGING THE COST OF MATERNITY LEAVE Let’s look at: –Maternity leave (in general) Entitlement What it costs your school (net £ ‘loss’) What you can claim back –Maternity Leave Insurance (the cover differs dramatically between insurers) Ultimately, what is your actual £ loss, after you have claimed back what you can from the state, so that you can decide if insurance is needed and, if so, how much.

MANAGING THE COST OF MATERNITY LEAVE Some abbreviations / terms you need to know: –Ordinary maternity leave –Additional maternity leave –OMP = Occupational Maternity Pay –SMP = Statutory Maternity Pay –SSMP = Standard SMP

MANAGING THE COST OF MATERNITY LEAVE Entitlement –26 wks ‘Ordinary’ + 26 wks ‘Additional’ mat leave Minimum take –2 wks (4 for factory workers) Timings –Earliest start = 11 wks before due date –Latest = the day after giving birth –If a pregnancy-related illness occurs in the 4 wks prior to the due date, maternity leave starts

MANAGING THE COST OF MATERNITY LEAVE

To be eligible for “burgundy book” OMP a staff member must have more than 1 year’s continuous service with one or more relevant employer(s) at the qualifying date (11 th week before the Expected Date of Confinement). To retain their eligibility for OMP a staff member is obliged to return to work and complete the equivalent of 13 weeks of their pre-leave working FTE. OMP = Occupational Maternity Pay

MANAGING THE COST OF MATERNITY LEAVE How much is a Teacher paid? –Overall average is £37,600 –Average for a primary leadership teacher is £53,000 (academy) –Average for a primary classroom teacher is £32,200 (maintained) Source : School Workforce FSR April Nov 2012

MANAGING THE COST OF MATERNITY LEAVE 6 90% wkly pay 33 SSMP Paid by the employer, but able to reclaim 92% through reduced employer NI contributions. SMP 4 100% wkly pay 2 90% wkly pay 12 50% wkly pay + SSMP 21 SSMP Only if entitled in employment contract (applies to most teachers, some non-teachers) OMP

MANAGING THE COST OF MATERNITY LEAVE SMP 90% of pay for 6 wks + SSMP for 33 wks = £7,848

MANAGING THE COST OF MATERNITY LEAVE SMP v NI reclaim NI reclaim is £7,221, so if no OMP only £627 ‘loss’

MANAGING THE COST OF MATERNITY LEAVE OMP 100%, 90%, % +SSMP, SSMP = £11,880

MANAGING THE COST OF MATERNITY LEAVE OMP exceeds SMP

MANAGING THE COST OF MATERNITY LEAVE OMP v NI reclaim £11,880 - £7,220 = £4,660 needed to cover the OMP of the teacher on leave

MANAGING THE COST OF MATERNITY LEAVE What does this mean for your school? –You have the teacher’s salary for the year of leave included in your budget (£32,200 average) –You have to pay £4,660 of that to cover the OMP –Leaves £27,540 in your budget to cover paying for a replacement teacher –For leadership on £53,000, it becomes £7,300 needed to cover OMP leaving £45,700 to pay for replacement and “acting-up” payments –If these amounts are not enough, insurance can help

MANAGING THE COST OF MATERNITY LEAVE A fair summary?... –Not all school leaders are aware of the full picture –Perhaps because the claiming back of the 92% SMP is done by your payroll provider –You’re more likely to have been thinking about OMP than SMP –You might have been over-estimating the true (net) loss Now that you know the net loss, you can decide how to transfer this risk (remember Identify / Measure / Manage / Transfer)

MANAGING THE COST OF MATERNITY LEAVE Your choices –Self-manage –LA fund (if available) –Maternity Leave Insurance How does each charge you? How much does each charge you? How does each pay out?

MANAGING THE COST OF MATERNITY LEAVE Maternity Leave Insurance –How are you charged? All staff or female staff? Staff numbers or FTE? –How much are you charged? Age rated seems sensible (usually in bands) –How is it paid? Usually a lump sum (e.g. as a multiple of the Daily Benefit on your Staff Absence Insurance) –How simple to claim? Usually produce a MATB1

MANAGING THE COST OF MATERNITY LEAVE Maternity Leave Insurance –When is it paid? At what point during the leave? Does the person have to return to work? And on the same hours? Some policies insist on these last two points although it’s not uncommon for a person to return on less hours or to not return at all –Are there any exclusions? Bound to be It is the EXTENT which matters

MANAGING THE COST OF MATERNITY LEAVE Maternity Leave Insurance –Which would you prefer? A claim is invalid if the person was already pregnant at the start of the policy OR A claim is invalid if the person has an expected date of confinement which is within 7 months of the start of the policy –Does the premium reflect his? Is it reduced in its first year?

MANAGING THE COST OF MATERNITY LEAVE Maternity Leave Insurance –Will you be ‘stuck’ with an insurer at renewal time? What if a person is mid-leave? Do you get a pro-rata claim payment if you don’t renew? Or do you have to stay with the insurer and wait till the leave has ended?

MANAGING THE COST OF MATERNITY LEAVE Adoption Leave & Paternity Leave –Adoption Leave Entitlement is now the same as maternity leave –Paternity Leave 5 or 10 days Does the insurance fully cover these?

MANAGING THE COST OF MATERNITY LEAVE Summary pointers –Actual average loss £4,660 –Insurance. Look for: Appropriate lump sum. Exclusion based on EDOC instead of pregnant Premium reflects this (half-price in first year) Have to return to work? On same hours? Pro-rata payment even if not renewed Adoption & paternity leave included (properly) See / Our Documents / Useful Guideswww.theeducationbroker.co.uk