Cutting Statutory Sick Pay will increase the benefits bill, not employment
One of today’s leaked proposals on employment rights is a Government plan to reduce the time period over which employers have to pay Statutory Sick Pay (SSP) for qualifying staff. If reports are correct, this policy seems likely to be a Coalition own goal. While evidence shows that it will have no positive impact on employment rates, it does seem likely to lead to increased unemployment (as workers are required to leave jobs that they would currently have a greater chance of returning to) and a rise in social security expenditure.
At present, those entitled to SSP (broadly speaking those who have been sick for more than four days in a row and who have paid adequate National Insurance Contributions) can recieve the payment for up to 28 weeks of illness for their period of incapacity. The amount paid is hardly generous – at a maximum of £79.15 a week it is just over £10 a week more than Jobseeker’s Allowance.
At present, as employees reach the end of their period of entitlement to SSP their employers are required to complete at SSP 1 form, which is intended to help Jobcentre Plus to make a decision on whether the employee is entitled to Employment and Support Allowance. Should the individual meet the ESA criteria (which is likely, given their condition has prevented them from working), they can then expect to recieve up to £96.85 a week (the amount paid to disabled claimants in the ‘support group’, which is for those who are not considered by the DWP to be currently capable of work). If they are found ineligible for the benefit, then their incomes will fall more quickly than would currently be the case leaving sick and disabled people with an even greater risk of poverty.
As Business Link informs employers, SSP is meant to “provide a measure of earnings replacement for employees who are off work through illness”. By proposing cuts to eligibility, the Government is making it less likely that sick employees will return to work – a policy that seems to go against their frequently stated aim of increasing the number of sick and disabled people in jobs- moving responsibility for replacing the incomes of these workers from employers to taxpayers, increasing poverty rates and doing nothing (as my previous post illustrated) to increase employment overall.