Recommendations & Conclusions
4 items
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), …
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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), or 90% of earnings, whichever was lower. This would be considerably more than the 2023–24 SSP rate of £109.40 but not so much as to place unreasonable additional costs on most employers. The 90% replacement rate for those earning below the flat rate of SMP would ensure, as the current SSP system does, that no one’s SSP payments could exceed their usual earnings. By the start of financial year 2025–26, the Government should increase the rate at which Statutory Sick Pay is paid in line with the flat rate of Statutory Maternity Pay.
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Government response AI summary
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 continues to review the rate …
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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 …
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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 economy that some predict, especially given the potential for levels of absenteeism to increase. The Government should maintain the three-day waiting period while keeping it under periodic review.
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Government response AI summary
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.
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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 …
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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 more egregious as many of them will be working in some of the lowest-paid and least secure parts of the economy. We recognise that self-employed people cannot be made eligible for SSP, but we strongly believe that the Government must do more to ensure they are no worse off financially during periods of sickness than employees on SSP. Our preference is for the Government to establish a contributory sick pay scheme for self-employed people. 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.
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Government response AI summary
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.
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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 …
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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 benefits of GIP. We still have concerns, however, about the double taxation applied to some GIP 36 Statutory Sick Pay policies. The Government should set out in response to this report exactly what it has done, and plans to do, to promote group income protection among smaller businesses, including any proposals to incentivise take-up. It should also set out what plans it has to rectify the anomaly of salary sacrifice arrangements being subject to double taxation.
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Government response AI summary
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 including insurers.
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Department for Work and Pensions