· News

CIPD calls for Statutory Sick Pay reform

The CIPD has said that the UK’s Statutory Sick Pay (SSP) is broken, and a majority of employers agree it needs to be increased.

In its report What should an effective sick pay system look like? the body has recommended government remove the lower earnings limit to SSP, which currently means an estimated 5.6 million working people, including the self-employed, aren’t entitled to receive it.

It is also calling for SSP to be raised to at least the equivalent of the National Minimum Wage or National Living Wage.

Instead of the current £96.35 per week, this would mean that the average worker, over 23, on seven hours a day, would be entitled to £62.37 per day, pro-rata.

Problems with sick pay:

Morrisons to cut sick pay for unvaccinated, isolating employees

Sick pay won't be extended to low income employees, government confirms

Labour pledges to reform sick pay and ban zero-hours contracts

Nearly two thirds (62%) of the 1,000 employers surveyed by the CIPD agreed that the current SSP rate is too low and were in favour of an increase.

This includes 57% of SMEs, which would find it more challenging than large employers to cover the cost of SSP.

A reform of the current system is also advocated for by various employment stakeholders, including the Trades Union Congress (TUC) and living standards think tank the Resolution Foundation.

At the height of the pandemic in December 2020, the Resolution Foundation released a briefing document highlighting how the low rate of SSP was deterring people from taking time off when ill with COVID-19.

Mike Brewer, the think tank’s chief economist, told HR magazine that the ongoing challenges of the pandemic, including the rise of the new Omicron variant, makes the case for SSP reform even clearer than before.

“While the government’s £500 Test and Trace Support Payments may offer support to some workers, only one-in-eight workers in England are covered by this scheme,” said Brewer.

“Introducing appropriate, accessible short-term support this winter for all workers is an immediate priority – but on a more long-term basis, we must reform Statutory Sick Pay, to ensure that all those who need it are covered, and to ensure that the amount people receive is adequate to their needs.”

Number and percentage of employees not eligible for SSP due to pay, by age

Age groups

Number of employees not eligible for sick pay

% of those not eligible for SSP

All employees

% of all employees

% not eligible for SSP































Source: ONS – 2019 LFS data on earnings in main job, extracted by TUC.

The Resolution Foundation is also in favour of removing the lower earnings limit to SSP and raising entitlement to at least the current Real Living Wage.

In addition to higher SSP and removing the lower earnings limit, the CIPD has recommended government review other parts of the current system, such as the rules on a phased return to work, protections for self-employed and the number of days needed to qualify for SSP payment (currently three).

It has also called on employers to ensure they have a financial wellbeing strategy in place to care for staff.

CIPD senior employment relations adviser Rachel Suff said: “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.

“Not only does SSP need to provide an effective financial safety net for those unable to work when sick, it needs to better reflect today’s labour market.”

A list of the CIPD’s full recommendations for SSP reform can be found here.