Campaign group Pregnant Then Screwed has launched its legal challenge against the Treasury over the Self-Employment Income Support Scheme (Seiss), arguing that it is discriminatory and in breach of equality laws.
The scheme was introduced last year to help self-employed workers sustain themselves after numerous sectors were shut down due to the Covid-19 crisis.
The charity argues that tens of thousands of women have received lower payments than those whose average income was unaffected by maternity leave because of the way the grants are calculated.
According to the Treasury, Seiss payments are assessed based on average monthly profits over the last three tax years, between 2016 and 2019, and worth up to £2,500 a month. However, this method of calculation and conditions of eligibility means the scheme does not exempt periods of maternity leave.
Lawyers for Pregnant Then Screwed argued at a remote hearing on Thursday that this makes the scheme indirectly discriminatory towards 69,200 women in the UK.
Joeli Brearley, founder of Pregnant Then Screwed, said in a statement earlier this week: “The government has had nine months to amend this scheme so that it doesn’t discriminate against women, but they have chosen not to.
“We’ve had heartbreaking messages from so many women. For some this drop in income has left them and their young family in desperate poverty, while their male colleagues are in receipt of the full benefit.”
Jude Bunting, representing the charity, said in documents before the court: “The Seiss is a general policy or measure. It has disproportionately prejudicial effect on women who have not worked for reasons relating to maternity.
“Women who have not worked for reasons relating to maternity receive significantly smaller grants under the Seiss than they would otherwise be entitled to.”
He argued that the scheme “unlawfully discriminates against self-employed women who have taken a period of leave relating to maternity or pregnancy”, adding that Seiss is also unlawful because the Treasury breached the public sector equality duty under the Equality Act 2010.
“The defendant has not produced evidence to show that it rigorously considered the position of women who did not work for reasons relating to pregnancy and/or maternity at the time that the Series was announced on 26 March 2020 or when the Seiss decision was brought into effect on 30 April 2020,” said Mr Bunting.
“The defendant failed, at the time, to consider the impact of Seiss on a protected group with rigour and an open mind.”
According to Pregnant Then Screwed, the Chancellor Rishi Sunak and his legal team responded to a pre-action protocol letter by comparing maternity leave to taking a sabbatical. He previously said to the charity that “for all sorts of reasons people have ups and downs and variations in their earnings, whether through maternity, ill-health or others”.
At the hearing on Thursday, Mr Bunting told Mrs Justice Whipple: “There has been no meaningful assessment of the impact of the scheme on those with the protected characteristic of pregnancy and maternity.”
The government is opposing the challenge. Julian Milford QC, counsel for the Treasury, asked the judge to dismiss it in written submissions, arguing that the use of average trading profits (ATP) to calculate payments does not amount to indirect indiscrimination.
He said: “The effect of using ATP as a measure for the amount of Seiss is to treat everyone in the same way.
“It is not a provision, criterion or practice (‘PCP’) which it is harder for women (or recent mothers) to satisfy than men.”
He added that, even if the use of ATP was discriminatory, it would be justifiable because the support offered by Seiss is “a policy decision” that “was taken to utilise a proxy calculation that best represented the income forgone”.
Mr Milford admitted that it is “perfectly true” that the calculations and subsequent payments would be affected “whether negatively or positively, by the fact that persons may have taken leave from self-employment during the relevant tax years for a variety of different reasons, one such reason being maternity”.
But he added that this fact alone “does not disclose” discrimination.
He also argued that equality issues and the impact of Seiss on self-employes recent mothers were specifically considered by Mr Sunak prior to introducing the scheme.
Mrs Justice Whipple reserved her ruling to a later date.
Additional reporting by PA