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Government ditches plans to extend sick pay to low paid workers

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Written by: Emma Lunn
22/07/2021
The government has done a U-turn on a promise to grant sick pay to two million workers on low incomes.

Current rules mean you have to earn £120 a week in order to qualify for statutory sick pay (SSP) of £96.35 a week. This includes people who have multiple jobs which are each paid below the lower earnings limit.

Two years ago, the government said there was a case for removing the requirement for claimants to earn at least £120 a week. But a consultation response published this week entitled Health is everyone’s business announced that the reforms will not go ahead.

The consultation response said the government did not extend SSP to employees earning below the lower earnings limit during the pandemic because the “most effective way” of supporting these workers was through the Coronavirus Job Retention Scheme and the existing benefits system.

The consultation asked whether respondents agreed that SSP should be extended to employees earning below the lower earnings limit. The majority (75%) of respondents agreed that SSP should be extended to employees earning below £120 a week. Respondents included small and large employers that would bear the cost of extending sick pay.

However, this week the government stated that: “Government maintains that SSP provides an important link between the employee and employer but that now is not the right time to introduce changes to the sick pay system.”

According to the Trades Union Congress (TUC), 51% of workers in insecure jobs receive no pay at all when off sick and a third of those on zero hours contracts workers don’t qualify for any sick pay. Seven out of 10 of those earning less than the £120 needed to qualify for sick pay are women.

The TUC says these workers will continue to face the choice between putting their colleagues at risk by going into work or putting their family into hardship by missing out on pay.

The TUC calculated that extending sick pay would cost about £150m a year – less than 1% of the test and trace budget.

Frances O’Grady, TUC general secretary, said: “The government has abandoned millions of low-paid workers at the worst possible time. With Covid cases going through the roof, its refusal to make sick pay available for all is grossly irresponsible and will help drive infections still higher.

“This is yet another example of short-sighted penny pinching from the Treasury, which is undermining Britain’s public health effort.

“The millions of low-paid workers who are not eligible for statutory sick pay – mostly women – could only dream of a VIP pilot scheme to allow them to opt out of self-isolation at the drop of a hat. Instead, they are forced to choose between doing the right thing or being plunged into financial hardship.

“Rather than supporting people to self-isolate, ministers are making it financially impossible. This boils down to political choices. Giving everyone access to statutory sick pay would cost less than 1% of the failed test and trace scheme.

“Over a year and a half into the pandemic, it’s high time the government did the right thing by making sick pay available to all and raising it to a real Living Wage.”

Mike Brewer, chief economist and deputy chief executive at the Resolution Foundation, Tweeted: “Sick pay has been a big weakness in the safety net in the pandemic. It has been linked to low compliance with self-isolation and test and trace and, during the first wave of Covid-19, care homes paying sick pay were less likely to have seen Covid-19 cases among residents

“The most concerning point about SSP is that 2 million earning less than £120/wk are entitled to no support when sick or self-isolating. This includes one in six workers in customer-facing sectors.”

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