Statutory sick pay should be increased and made available to all employees, not just those earning above the lower earnings limit, a cross-party group of MPs has recommended.
A statutory sick pay report from the Commons’ work and pensions committee concludes that SSP, which is set to increase from £109.40 to £116.75 per week on 6 April 2024, does not provide adequate support for workers most in need of protection from financial hardship during sickness absence.
Thousands of workers are excluded from receiving SSP if they fall ill because they do not earn above the lower earnings limit (£123 per week or £533 per month for 2023/24), are not classed as an employee, or because they return to work within a few days; SSP is not paid for the first three days of sickness absence.
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Analysis published by the TUC in January revealed that 1.3 million people do not earn enough to qualify for statutory sick pay, 70% of whom are women.
The committee’s report, published following its inquiry into the UK’s sick pay regime, finds the rate of SSP is too low, and should increase in line with statutory maternity pay. It says this would strike a reasonable balance between protecting workers and not placing excessive costs on employers who do not operate their own occupational sick pay regimes.
However, the committee has stopped short of removing or reducing the current three-day “waiting” period, finding that it could have “unpredictable consequences” because employees could change their behaviours.
It recommends that the government amends legislation to allow employers to pay SSP in combination with usual wages to enable employees to take a phased return to work after a period of sickness absence, which it says could benefit individuals with fluctuating health conditions and their employers.
It also suggests that the government should consult with SMEs on the design of an SSP rebate for smaller organisations, as well as establish a contributory sick pay scheme for self-employed people.
Labour MP Sir Stephen Timms, chair of the work and pensions committee, said: “Statutory sick pay is failing in its primary purpose to act as a safety net for workers who most need financial help during illness. With the country continuing to face high rates of sickness absence, the government can no longer afford to keep kicking the can down the road on reform. The committee’s proposals strike the right balance between widening and strengthening support and not placing excessive burdens on business.
Statutory sick pay is failing in its primary purpose to act as a safety net for workers who most need financial help during illness” – Sir Stephen Timms MP
“A growing number of workers are now classified as self-employed and a new contributory sick pay scheme for self-employed people would be a welcome step towards ensuring they are they are no worse off financially during periods of sickness than employees on SSP.”
The CIPD’s senior policy adviser Rachel Suff described the current SSP regime as “broken” and said further changes were needed.
“Reform of SSP needs to be aligned with other work and health reforms, such as improving access to quality occupational health provision, particularly for small firms,” she said.
“This is just one step towards addressing the UK’s challenges around sickness rates and economic inactivity. Both the UK government and employers must look carefully at the root causes for absence. This means managing the main risks to people’s health from work to prevent stress, as well as early intervention to prevent health issues from escalating where possible.”
TUC general secretary Paul Nowak said: “The Covid-19 pandemic showed that our sick pay system is in desperate need of reform. It beggars belief that ministers have done nothing to fix sick pay since.
“It’s a disgrace that so many low-paid and insecure workers up and down the country – most of them women – have to go without financial support when sick. The committee is right that ministers urgently need to remove the lower earnings limit and raise the rate of sick pay.”
Katharine Moxham, spokesperson for group risk industry body Group Risk Development (GRiD) said: “This would create a stronger safety net for employees underpinned by more comprehensive financial support from employers and a clearer pathway back to work, with insurance (and its support services) available to help them manage this risk.
“Increased SSP liability would strengthen the workplace link and encourage employers to invest in workplace health, as well as improve safety nets and deliver fiscal benefits to the Exchequer, by helping people to remain in productive employment.
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“We’re pleased to see that the report recognises the role that group income protection (GIP) could play, particularly in helping small businesses cover the cost of sick pay.”
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