Chancellor George Osborne has announced that shared parental leave and pay will be extended to working grandparents.
The government is to bring forward legislation to enable this change, with the aim of implementing the policy by 2018.
The government will consult on the details in the first half of next year.
The planned changes will increase flexibility and choice in parental leave arrangements – and support working parents with the costs of childcare during the first year of a child’s life.
The government says the measures are in recognition of the crucial role that working grandparents play in providing childcare and supporting working families.
Evidence suggests that nearly two million grandparents have given up work, reduced their hours – or have taken time off work – to help families who cannot afford childcare.
Grandparents may be contributing as much as £8bn annually to bridge the gap as work pressures increase, figures suggest.
Evidence shows more than half of mothers rely on grandparents for childcare when they first go back to work after maternity leave – and more than 60% of working grandparents with grandchildren aged under 16 provide some childcare.
In total, some seven million grandparents are involved in childcare. As a result of the change, parents will be able to return to work sooner if they wish to.
The new system will also provide flexibility in working arrangements for grandparents, without fear of losing their job.
Of working grandparents who have never taken time off work to care for grandchildren under 16, around one in ten have not been able to do so because they have either been refused time off by their employer – or because they felt unable to ask.
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