The Statutory Sick Pay system is broken and needs urgent reform, CIPD warns

Nearly two thirds (62%) of employers agree that the Statutory Sick Pay rate is too low and should be increased

17 Dec 2021| News

A new report by the Chartered Institute of Personnel and Development (CIPD), the professional body for HR professionals, has called for the reform of Statutory Sick Pay (SSP). As part of a report entitled ‘What should an effective sick pay system look like?’, the CIPD surveyed over 1,000 employers. It found that nearly two thirds (62%) of employers agree that the SSP rate is too low and should be increased.

Currently, UK Statutory Sick Pay stands at £96.35 per week for up to 28 weeks, which is lower than most other European countries. The Covid pandemic has further exposed how inadequate SSP is, with many continuing to work while ill or when needing to self-isolate.

Many workers also fail to qualify for SSP at all. The CIPD states:

“Of the UK’s 32.5 million-strong workforce, 5.6 million people (17.2%) do not currently qualify for SSP. This includes the self-employed and those who are unable to access SSP because they don’t meet the lower earnings limit (an employee must have average weekly earnings of at least £120 a week to qualify).”

In the report, the CIPD calls for the Government to raise the level of Statutory Sick Pay to be at least equivalent to someone earning the National Minimum Wage/National Living Wage, whilst also recommending the widening of eligibility for SSP by removing the lower earnings limit.

In addition, the CIPD recommends a consultation, looking at wider reform of SSP, such as amending the rules to allow for phased returns to work, removing the three qualifying days for payment of SSP, and looking at opportunities to improve income protection for the self-employed.

Despite reform of SSP being a key focus of several UK government consultations, there are currently no plans to take forward any proposals for change. Rachel Suff, senior employment relations adviser at CIPD, said

“The UK’s SSP system has been broken for a long time and the pandemic has only highlighted its failure to protect the lowest paid and most vulnerable members of our society. However, despite a number of government consultations proposing reforms to SSP, there are currently no real plans to improve the system. SSP deficiencies can have a devastating impact on people’s health and wellbeing, including financial distress. With an ageing workforce and skills shortages, it’s even more important that we have an effective SSP system to help employers attract and retain a diverse workforce.”

The CIPD’s report and full recommendations can be found here