Following a recent consultation, the Department for Business and Trade confirmed on 1 July that significant reforms to Statutory Sick Pay (SSP) will come into force from April 2026. While the changes are aimed at enhancing support for employees, they will also introduce additional costs for employers.
What’s changing to Statutory Sick Pay?
From April 2026, the following reforms to Statutory Sick Pay will apply:
- Day one entitlement: SSP will become payable from the first day of sickness absence, rather than the current system where payment begins after day three.
- Removal of the lower earnings limit: The current earnings threshold of £125 per week will be abolished, meaning employees will no longer need to meet a minimum income level to qualify for SSP.
Additionally, while the flat rate calculation will still apply, it will be determined differently for employees earning below the current lower earnings limit. These employees will receive the lower of either 80% of their normal weekly earnings or the government-set flat rate.
These changes are designed to make sick pay more inclusive and accessible, particularly for lower-income and part-time workers.
Statutory Sick Pay – what you need to consider
While implementation is still some time away, it’s advisable for employers to begin planning for these changes. Key considerations include:
- Budgeting for increased SSP liabilities, particularly for businesses with a high incidence of short-term sickness absence, as SSP is treated differently from maternity and paternity payments and cannot be recovered from the government, leaving employers to bear the full cost of SSP payments.
- Reviewing payroll systems to ensure readiness for day-one SSP processing and removal of the earnings threshold.
- Updating employment contracts and sickness policies to reflect the upcoming changes even where you operate an enhanced sickness scheme.