Think tank criticises government’s decision not to reduce SSP minimum earnings threshold

A DWP and DHSC consultation has decided now is ‘not the right time’ for reform despite the majority of businesses backing a change

The government is not considering making any changes to statutory sick pay (SSP) despite the majority of businesses being in favour of reform, arguing now is “not the right time” – a decision experts have described as “very disappointing”.

In its response to its consultation on health in the workplace, the government said 75 per cent of respondents agreed that SSP should be extended to employees currently earning below the current minimum earnings limit of £120.

It said this measure was supported by “small and large employer respondents alike”, with respondents believing a lower limit would better incentivise firms to take steps to reduce sickness absences.

However, while the government said the consultation had “posed several important questions” about the future of SSP, now was “not the right time to introduce changes to the sick pay system”.

It also defended its decision not to expand the eligibility of SSP to lower earners during the outbreak, arguing that it was not the “most efficient way” to support workers and that it would have “placed an immediate cost on employers at a time where most required government support”.

“The most effective way of getting financial support to these individuals was through the coronavirus job retention scheme and the existing benefits system,” it said.

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However, Mike Brewer, chief economist and deputy chief executive of the Resolution Foundation, criticised the decision not to lower the earnings threshold, calling it “very disappointing and surprising”.

“The most concerning point about SSP is that two million earning less than £120 [per week] are entitled to no support when sick or self-isolating. This includes one in six workers in customer-facing sectors,” he said in a series of posts on Twitter, adding that inadequate sick pay had been linked to low compliance with self-isolation.

“During the first wave of Covid-19, care homes paying sick pay were less likely to have seen Covid-19 cases among residents,” he said.

Brewer also disputed the government’s claim that the furlough scheme was an effective way to provide financial support to workers, pointing to claims made last month that the government actively tried to hide the fact that self-isolating workers are eligible for the scheme.

Speaking to People Management, Brewer said the decision not to extend SSP was “a poor one in normal times, and a frankly irresponsible one during a global pandemic”.

“This will put many low-paid workers in a tough bind should they develop Covid symptoms – having to trade off the big financial hit of not being able to work with the big health risk of spreading the virus in their workplace. No worker should have to face that dilemma.”

The government’s response to the consultation also looked at how to better support employees returning from sickness absences, but ruled out introducing a new right to request workplace modifications on health grounds on the basis that this would risk undermining existing workplace protections.

In particular, it said respondents to the consultation were concerned that creating such a right could conflict with the existing duty to make reasonable adjustments for disabled people by shifting employers' focus.

Instead, the government said there was a “strong case to consider what more could be done to raise awareness and understanding” among both employers and employees about their existing rights and responsibilities.