Recommendations & Conclusions
10 items
1
Conclusion
Fourth Report - Statutory Sick Pay
Accepted
Statutory Sick Pay does not currently provide adequate protection for those who most need protecting from financial hardship during periods of sickness absence. It consequently fails to perform its primary function of providing a basic level of income protection.
Government response. The government agrees that the current SSP system fosters economic insecurity and is taking specific actions to provide wider access, including extending eligibility to those earning below the Lower Earnings Limit (who will receive 80% of normal earnings) and removing …
Department for Work and Pensions
2
Recommendation
Fourth Report - Statutory Sick Pay
Rejected
The rate of Statutory Sick Pay is too low. Of all the proposals for increasing the SSP rate, we think a rate in line with the flat rate of Statutory Maternity Pay would strike the best balance. It would increase the rate to £172.48 per week (using the 2023–24 rate), …
Government response. The government rejected the recommendation to increase the Statutory Sick Pay rate in line with Statutory Maternity Pay, citing the different nature and estimated £500 million annual cost implications for employers, and the lack of reclaim mechanisms, while noting it …
Department for Work and Pensions
3
Recommendation
Fourth Report - Statutory Sick Pay
Accepted
All employees should be eligible for Statutory Sick Pay, not just those earning above the lower earnings limit (LEL). We accept that, as the Government says, those earning below the LEL may be entitled to Universal Credit, but there remains a compelling case for removing it. It would enable people …
Government response. The government committed to removing the Lower Earnings Limit from the SSP system through the Employment Rights Bill, which will make up to 1.3 million more employees eligible. They have also introduced an amendment to set the new rate for …
Department for Work and Pensions
4
Recommendation
Fourth Report - Statutory Sick Pay
Rejected
Of all the reforms proposed to Statutory Sick Pay, removing the three-day waiting period would, we believe, have the most unpredictable consequences, since it could result in significant behavioural change by employees. It is uncertain whether removing the three-day waiting period would result in the increases in productivity across the …
Government response. The government rejected the recommendation to maintain the three-day waiting period, stating they will remove it from the SSP system through the Employment Rights Bill to allow employees to access SSP from their first day of sickness absence.
Department for Work and Pensions
5
Recommendation
Fourth Report - Statutory Sick Pay
Accepted
We understand why the Government decided that the Covid-19 pandemic was the wrong time to introduce changes to Statutory Sick Pay, as these would have placed immediate additional costs on employers. This argument, which we believe is now less valid than during the pandemic, does not apply to enabling employees …
Government response. The government agrees with the recommendation and will amend the Period of Incapacity for Work through the Employment Rights Bill, allowing employees to receive SSP for individual days of incapacity and thus facilitate phased returns to work.
Department for Work and Pensions
6
Recommendation
Fourth Report - Statutory Sick Pay
Deferred
The overall impact on business of reforming Statutory Sick Pay is hard to predict, but even if it did not result in the kind of net benefits some have predicted, we believe that larger businesses would be able to absorb the costs of the modest reforms we have recommended. For …
Government response. The government did not commit to consulting on or introducing a small business SSP rebate, instead referring to the recently announced independent "Keep Britain Working" review which will broadly consider how employers can be supported in promoting healthy workplaces.
Department for Work and Pensions
7
Recommendation
Fourth Report - Statutory Sick Pay
Accepted
According to statistics, the enforcement of Statutory Sick Pay through HMRC appears to be reasonably effective. However, there is evidence which suggests that some workers are either too afraid to ask for SSP or not aware of their entitlement, indicating that the enforcement statistics do not tell the whole story. …
Government response. The government committed to establishing the new Fair Work Agency, which will take on SSP enforcement and increase awareness and accessibility of workers' rights as a single point of contact. They also mentioned continued engagement with employers and existing digital …
Department for Work and Pensions
8
Recommendation
Fourth Report - Statutory Sick Pay
Rejected
Far too many people lack a financial safety net during periods of ill health as a result of being self-employed. In this respect, if no other, Statutory Sick Pay does not reflect modern working practices, given the increasing number of people classed as self- employed. Their exclusion is all the …
Government response. The government rejected the recommendation to establish a contributory sick pay scheme for self-employed people, stating that many already have private insurance and existing benefits like New Style ESA and Universal Credit are available.
Department for Work and Pensions
9
Recommendation
Fourth Report - Statutory Sick Pay
Rejected
Group income protection (GIP), though not an alternative to Statutory Sick Pay, can help small businesses to manage the cost of long-term sickness absence and increase the chances of employees making a full return to work. We welcome the Government’s plans to work with employers to raise awareness of the …
Government response. The government rejected the premise of "double taxation" for Group Income Protection salary sacrifice arrangements, explaining the current tax treatment. For promoting GIP, they referred to the independent "Keep Britain Working" review, which will engage with health and work stakeholders …
Department for Work and Pensions
10
Recommendation
Fourth Report - Statutory Sick Pay
Acknowledged
The statutory framework for Statutory Sick Pay is causing particular problems for recruitment companies in respect of the payment of agency workers. It is not sufficiently clear when a day is a qualifying day for agency workers or how a recruitment company might properly end their liability for paying SSP …
Government response. The government committed to updating its guidance on SSP for agency workers following changes in the Employment Rights Bill. Officials will also explore with stakeholders how to further improve clarity, including guidance, regarding SSP for agency workers, but did not …
Department for Work and Pensions