Statutory sick pay changes explained
Proposed statutory sick pay changes will introduce eligibility from the first day of sickness. The lower earnings threshold will also be removed.
These reforms are part of the Employment Rights Bill, which is currently making its way through Parliament. While not expected to take effect before autumn 2025, employers should begin reviewing and updating their internal policies.
It’s important to note that, unlike other statutory payments, SSP is not recoverable from HMRC. This means that employers will be fully responsible for the cost.
Day-one entitlement
Under current rules, employees do not receive SSP until the fourth consecutive day of absence. The three-day waiting period will be abolished. As a result, employees will receive SSP from day one of sickness.
This change will bring a number of implications:
- Employees won’t have to choose between coming to work unwell or losing income.
- Employers may face a rise in absences and a drop in productivity.
- Weekly SSP payments could more than double: from £47.50 to £118.75 (2025/26 rate).
Employers may also experience an increase in short-term absence abuse. This will require careful monitoring and clear absence policies. Strategies include regular check-ins during sick leave and conducting return-to-work interviews.
Removal of the lower earnings threshold
Currently, only employees earning at least £125 per week are eligible for SSP. This threshold will be removed.
Under the new system:
- Eligible employees will receive either the lower SSP rate or 80% of their average weekly earnings, whichever is greater.
- Some employees earning between £125 and £148 per week may receive slightly less SSP per day, but they will qualify for more days of payment overall.
For more details, the Government’s factsheet on this change can be accessed here.