Select committee: Work and Pensions Committee
Recommendation 9
Fourth Report - Statutory Sick Pay
Published 28 Mar 2024
Paragraph 73
Addressed to Department for Work and Pensions
Work and Pensions Committee Statutory Sick Pay All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
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.
From: Work and Pensions Committee, Fourth Report - Statutory Sick Pay (HC 148), paragraph 73, 28 March 2024
Government response
The government responded to the whole report on 14 May 2024 (deadline 28 May 2024).
Summary written by Accountability Index from the government's response. It is not the government's own words.The Government states that it "firmly believes that there is a case to strengthen SSP" and is delivering changes through the Employment Rights Bill, while it does not adopt the Committee's recommendations to keep the waiting period or to raise the SSP rate in line with Statutory Maternity Pay.
- On the Lower Earnings Limit, the Government is extending eligibility to those earning below it, and has brought forward an amendment setting the rate at "80% of average normal weekly earnings, or the flat rate, whichever is lower". It says this means "up to 1.3 million more employees" become eligible.
- On the waiting period, the Government notes the recommendation came under the previous administration and says it "will remove the three-day waiting period from the SSP system through the Employment Rights Bill".
- On the SSP rate, the Government does not commit to align it with Statutory Maternity Pay, citing an estimated additional cost of "c.£500 million per year" to business. It says it "continues to review the rate of SSP each year as part of the annual uprating process".
- On a small business rebate, the response notes the Percentage Threshold Scheme was "seen as administratively complex and was underused" and points to the independent Keep Britain Working review. On agency workers, it will update guidance "in due course".