The Work and Pensions Committee has today released its enquiry report on improving Statutory Sick Pay.
Commenting on the report, Katharine Moxham, spokesperson for GRiD (the industry body for the group risk sector) said:
“GRiD supports Government reforming Statutory Sick Pay (SSP). This would create a stronger safety net for employees underpinned by more comprehensive financial support from employers and a clearer pathway back to work, with insurance (and its support services) available to help them manage this risk”.
“Increased SSP liability would strengthen the workplace link and encourage employers to invest in workplace health, as well as improve safety nets and deliver fiscal benefits to the Exchequer, by helping people to remain in productive employment”.
“The Government should consider how smaller employers can be supported (e.g. conditional rebate if they can demonstrate sufficient employee support is in place), so that they are not overly burdened by increased SSP contributions”.
“We’re pleased to see that the report recognises the role that group income protection (GIP) could play, particularly in helping small businesses cover the cost of sick pay and, along with the Work & Pensions Committee, we welcome the Government’s plans to work with employers to raise awareness of the benefits of GIP.“
The bigger picture
Currently, statutory sick pay stands at a mere £109.40 per week, amounting to only 17% of average earnings. Moreover, there is a three-day waiting period before eligible individuals begin receiving this support. Consequently, the sum for the initial week of sickness absence for someone on a standard five-day workweek amounts to a meager £44, representing just 7% of average weekly earnings. However, starting from April, the government plans to raise it by 6.7% to £116.75 weekly, aligning with inflation.
The Work and Pensions Select Committee argue that Statutory sick pay should increase to £171.48 a week – 27% of average earnings. Additionally, all employees should qualify for SSP, regardless of whether their earnings surpass the lower earnings threshold of £123.
What about the self-employed?
As reported on www.thecanary.co.uk, , The Committee’s Chair, Stephen Timms MP, says: “Statutory sick pay is failing in its primary purpose to act as a safety net for workers who most need financial help during illness. With the country continuing to face high rates of sickness absence, the Government can no longer afford to keep kicking the can down the road on reform”.
“A growing number of workers are now classified as self-employed and a new contributory sick pay scheme for self-employed people would be a welcome step towards ensuring they are no worse off financially during periods of sickness than employees on SSP.”
The question begs whether the upcoming raise in SSP is sufficient and the changes proposed truly adequate. The increase in SSP is a step in the right direction, especially for the employee’s it concerns. However, it could be argued that the new reform neglects enough of the population to be deemed inadequate.
General Secretary of the Trades Union Congress (TUC), Paul Nowak, suggests: “It’s a disgrace that so many low-paid and insecure workers up and down the country – most of them women – have to go without financial support when sick. The committee is right that ministers urgently need to remove the lower earnings limit and raise the rate of sick pay”.
Wider reform is also needed to remove the three days people must wait before they get any sick pay at all. Working people deserve better.”
This is exemplified as in January, an analysis released by the TUC uncovered that 1.3 million individuals fail to meet the earnings criteria for statutory sick pay, with 70% of them being women. Workers on zero-hours contracts are significantly disadvantaged, being eight times more likely than those on stable contracts (30.3% compared to 3.6%) to be ineligible for the benefit due to insufficient earnings.
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