Self-employed to gain maternity and pension benefits under new EU law

European Commission buildings in Brussels

 Self-employed workers and their spouses will enjoy better social protection – including the right to maternity leave for the first time – under new legislation endorsed by EU governments this week.

The new rules extend national social security provisions for the self-employed to their spouses working in the business, including wives working on the family farm, in their own right. It also provides for a period of maternity leave to be granted to self-employed women/spouses in line with minimum EU standards (Directive 92/85/EEC).

The Irish government now has two years to transpose the Directive (which only sets outline standards) into national law. The choice of funding method will be a matter for each country to decide. 
The new rules should improve the social protection rights of millions of women in the labour market, boosting female entrepreneurship. At present, women represent only one in three entrepreneurs. It will also help women working in family businesses who face poverty due to the bankruptcy, divorce or death of their partners. It will also give older women working in family businesses the right to a pension in their own right.

The Directive on self-employed workers and assisting spouses repeals and replaces an earlier law from 1986 (Directive 86/613/EEC).

“This new law makes real improvements to the rights of self-employed workers and their partners, in particular women,” said Viviane Reding, EU Commissioner for Justice, Fundamental Rights and Citizenship and Vice-President of the European Commission.

“It will help them to better balance work and family life and encourage more women to become entrepreneurs – which is good for the economy too. I would like to pay tribute to the Spanish and Swedish Presidencies and in particular to the European Parliament’s rapporteur Mrs Astrid Lulling for their hard work in reaching this agreement.”

The legislation, agreed with the European Parliament on 18 May and endorsed now by EU Member States, considerably improves the protection of female self-employed workers and assisting spouses in case of maternity or motherhood.
It will provide equivalent access to maternity leave as for employees, but on a voluntary basis. At EU level, this is the first time a maternity allowance has been granted to self-employed workers.

The new rules will also serve to promote entrepreneurship in general and among women in particular. There is a currently a major gender gap in this area – only 30% of entrepreneurs in Europe are women.

Finally, the provision on social protection for assisting spouses and life partners (recognised as such in national law) is also a considerable improvement from the 1986 Directive. They will have the right to social security coverage (such as pensions) on an equal basis as formal self-employed workers.

This will help to provide a stronger social safety net and to stop women from falling into poverty.

The Council of Ministers is now expected to formally adopt the legislation on 24 June 2010. EU countries will then have two years to introduce it into national law. Where justified by particular difficulties, they may have an additional period of two years to implement the provisions concerning assisting spouses.

Self-employment is a significant – albeit minority – form of employment in Europe, representing around 16% of the active population.
Around 11% of self-employed workers in Europe rely on the help of spouses and partners who work on an informal basis in small family businesses, such as a farm or a local doctor’s practice. These assisting spouses are traditionally completely dependent on their self-employed partner. As such, they are at a high risk of poverty in the event of divorce, their partner’s death or bankruptcy.
As far as employees are concerned, the EU recently adopted a new Directive improving the right to parental leave (IP/09/1854) and the Commission’s proposal for a revised Directive on maternity leave is currently in first reading by the European Parliament (see also IP/08/1450).

Further information
Proposal for a Directive on equal treatment between self-employed men and women
EU gender equality policy and legislation
Women and entrepreneurship