Cutting maternity and paternity pay risks increasing financial worries, stress, post-natal depression and relationship breakdown for new mothers and fathers, a leading parenting charity has warned.
The National Childbirth Trust (NCT) wrote to Prime Minister David Cameron urging him to confirm that maternity and paternity pay will not be included in the benefits cap.
And they asked him to restore the benefit's link with inflation, reversing Chancellor George Osborne's decision to limit annual increases to 1% for three years.
Mr Cameron sparked concern among parents last month, when he appeared to indicate, in response to an MP's question in the Commons, that maternity and paternity pay would be included in the cap which which will limit Government spending on welfare from 2015. However, Treasury aides later said that the benefit would be protected.
NCT chief executive Belinda Phipps said the limit on annual increases in the £137-a-week statutory maternity pay amounted to a real-terms cut in parents' income during the first months of their babies' lives.
"This real-terms cut will hit many parents' finances hard," she said. "If the Government is serious about valuing families then they should raise maternity and paternity pay and take it out of the benefits cap."
In her letter to the PM, Ms Phipps said: "Being a parent, you will understand the value of the first thousand days of parenthood - throughout pregnancy and until a child turns two. Leading child health experts worldwide agree that care given during this life stage has more influence on a child's future than any other time.
"Yet for many families this can also be a time of stress and it can put families under real financial pressure to meet the needs of their new baby. The struggle to make ends meet may put strain on a couple's relationship and force parents back to work earlier than they planned.
"Financial anxieties can increase the risk of post-natal depression for either parent, and relationship breakdown. Both lead to poorer physical and mental health outcomes for all family members.
"A failure to ensure that maternity and paternity pay rise in line with the cost of living will make it harder for new parents to spend time together to bond with their baby in the crucial first few months of life.
"In addition, by including maternity and paternity pay within the benefits cap, NCT believes that progress on increasing the rate of pay for maternity and paternity leave will be severely limited. If the Government's recent announcement on shared paternity leave is to be meaningful in any way, it is critical that we see increases in the rate at which it is paid."