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Maternity and paternity pay will not be protected from benefits cap

MATERNITY and paternity pay will not be protected from the benefits cap announced in the Autumn Statement, David Cameron has confirmed.

The Prime Minister confirmed that new mothers and fathers would be subject to a benefits cap, announced last week. Only the state pension will be outside the new limit, which is designed to control welfare spending.

Labour's Fiona O'Donnell, the MP for East Lothian, questioned how the move fitted with the Coalition's claim to be "family friendly".

The cap, announced by George Osborne as part of his Autumn Statement, will be brought in 2015, coinciding with the Coalition's shared parental leave policy.

This will allow parents to decide to how to divide time off work in the first year of their child's life.

An official impact assessment, however, estimated that the take-up will be very low - about 20,000 couples a year across the UK.

The Department for Business, Innovation and Skills estimated the policy would cost about £1 million a year.

The state currently provides 90% of average salary for the first six weeks of maternity leave, and statuary pay of £136.78 for the next 33 weeks. The total bill was £2.4 billion this year but it is predicted to rise to £2.57bn by 2017-18.

Coalition sources last night sought to downplay the chances maternity and paternity pay would be cut.

They emphasised the cap was spread across the welfare bill and included other costs which have risen dramatically in recent years, including housing benefit.

Asked if a baby boom could result in cuts to maternity pay due to the cap, Mr Cameron's spokesman said: "The point about the welfare cap is to be able to consider the ­pressures that there are across the welfare system to ensure that it is always affordable."

The cap "obliges the Government and future governments to look across the board at welfare pressures to ensure there is fairness on taxpayers", Mr Cameron's spokesman added.

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