The current level of Statutory Sick Pay “does not provide adequate support” for those who need a financial safety net during periods of illness, a cross group of MPs said.
A “modest” increase to Statutory Sick Pay (SSP) in line with Statutory Maternity Pay (SMP) should be made as part of much-needed reforms to the scheme, an influential group of MPs suggest.
The Work and Pensions Committee said the scope of SSP should also be extended so all employees are eligible, not just those earning above the lower earnings limit (LEL) – £123 per week since April 2022.
Currently, the SSP rate for 2023/24 is £109.40 per week (from day four of sickness), compared to £172.48 per week or 90% of average weekly earnings, whichever is lower, for SMP.
The cross party of MPs explained that the UK is experiencing relatively high rates of sickness absence and ill health, including high rates of mental health problems among young people. Indeed, 185.6 million working days were lost to sickness or injury in 2022.
There is growing concern about levels of ill health-related economic inactivity.
“Whilst this has prompted much debate about what the Government can do to reduce rates of ill health in the workplace, an issue that has received less attention is access to sick pay”, they said.
Raise sick pay for all
Most workers benefit from Occupational Sick Pay (OSP), provided voluntarily by employers, but a “significant minority” rely only on SSP, which is “less generous than OSP”. Moreover, some are not entitled even to SSP, either because they don’t earn enough, or because their period of sickness absence lasts fewer than four days.
The other group excluded are the self-employed.
The MPs said: “We recognise that self-employed people cannot be made eligible for SSP, but we strongly believe the Government must do more to ensure they are no worse off financially during periods of sickness than employees on SSP.
“We therefore conclude that the Government should establish a contributory sick pay scheme for self-employed people to provide them with the same level of income protection as would be available under SSP.”
In 2019, the then Government proposed removing the LEL and making SSP more flexible to enable employees to receive a combination of SSP and their usual wages to enable a phased return to work.
But in 2021, the next Government decided not to make any changes, on the grounds that the Covid-19 pandemic was the “wrong time” to introduce reforms that would place immediate additional costs on businesses, many of which were already struggling to survive.
“We conclude that SSP does not provide adequate support for those who most need protecting from financial hardship during periods of sickness absence. In particular, we raise concerns about the SSP rate and the LEL.
“We find that the former is too low and suggest that a modest increase to the SSP rate in line with Statutory Maternity Pay would strike a reasonable balance between providing additional financial support to sick workers and not placing excessive extra costs on businesses. We also conclude that all employees, not just those earning above the LEL, should be entitled to SSP.”
‘Proposals strike the right balance’
Stephen Timms MP, 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.”
TUC research published in January revealed that 1.3 million people do not earn enough to qualify for SSP – and 70% are women.
Paul Nowak, general secretary, 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. Working people deserve better.”
Related: Nearly third of workers overestimate statutory sick pay
