Source · Select Committees · Work and Pensions Committee
Recommendation 3
3
Accepted
Paragraph: 52
Remove the lower earnings limit for Statutory Sick Pay eligibility for all employees.
Recommendation
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 who have multiple jobs, each earning below the LEL, to receive SSP, and it would support those not claiming benefits. It would also help to maintain the link between employers and employees. Since employees with more than one job, each earning above the LEL, already qualify for SSP more than once, we are not persuaded that removing the LEL would result in too much complexity. The Government should remove the lower earnings limit for Statutory Sick Pay ahead of financial year 2025–26.
Government Response Summary
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 lowest earners at 80% of average normal weekly earnings or the flat rate, whichever is lower.
Paragraph Reference:
52
Government Response
Accepted
HM Government
Accepted
The Government’s Plan to Make Work Pay includes the commitment to remove the Lower Earnings Limit from the SSP system. The proposed changes to primary legislation we have introduced through the Employment Rights Bill will ensure that the safety net of sick pay is available to those who need it most. Removing the Lower Earnings Limit from the SSP system will mean up to 1.3 million more employees are now eligible to receive SSP. Many of this group previously did not receive any financial support from their employer during a sickness absence, and we are changing this. We committed to introducing a fair earnings replacement for the lowest earners. The Government ran a consultation from October to December 2024 on what this new percentage rate should be. After carefully considering responses to the consultation, we have brought forward a Government amendment to the Employment Rights Bill to set this new rate at 80% of average normal weekly earnings, or the flat rate, whichever is lower. We believe that this percentage rate strikes the right balance between providing the financial security that employees need, not discouraging people to return to work when appropriate, and limiting the costs to businesses.