Source · Select Committees · Work and Pensions Committee
Fourth Report - Statutory Sick Pay
Work and Pensions Committee
HC 148
Published 28 March 2024
Recommendations
2
Rejected
Para 51
Increase Statutory Sick Pay rate in line with flat rate of Statutory Maternity Pay.
Recommendation
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 …
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Government Response 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 annually.
Department for Work and Pensions
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3
Accepted
Para 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 …
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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.
Department for Work and Pensions
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4
Rejected
Para 53
Maintain the three-day waiting period for Statutory Sick Pay, subject to periodic review.
Recommendation
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 …
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Government Response 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.
Department for Work and Pensions
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5
Accepted
Para 54
Amend legislation to permit Statutory Sick Pay payment alongside usual wages for phased returns.
Recommendation
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 …
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Government Response Summary
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
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6
Deferred
Consult small and medium-sized businesses on the design of a Statutory Sick Pay rebate.
Recommendation
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 …
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Government Response Summary
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
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7
Accepted
Para 62
Publish strategy to raise awareness of Statutory Sick Pay entitlement and measure progress.
Recommendation
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 …
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Government Response Summary
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 guidance services.
Department for Work and Pensions
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8
Rejected
Para 67
Establish a contributory sick pay scheme for self-employed people mirroring Statutory Sick Pay protection.
Recommendation
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 …
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Government Response 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.
Department for Work and Pensions
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9
Rejected
Para 73
Publish plans to promote Group Income Protection for small businesses and rectify double taxation.
Recommendation
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 …
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Government Response 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.
Department for Work and Pensions
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10
Acknowledged
Review Statutory Sick Pay operation for agency workers and propose legislative amendments for clarity.
Recommendation
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 …
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Government Response Summary
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 commit to a formal review or legislative changes.
Department for Work and Pensions
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Conclusions (1)
1
Conclusion
Accepted
Para 50
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 Summary
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 the waiting period for payment from the first day of sickness absence.