From the TUC

Cutting Statutory Sick Pay will increase the benefits bill, not employment

10 Jan 2011, by in Labour market, Society & Welfare, Working Life

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.

3 Responses to Cutting Statutory Sick Pay will increase the benefits bill, not employment

  1. Cutting workers’ rights will not increase employment | Left Foot Forward
    Jan 10th 2011, 5:22 pm

    […] of random reductions in workers’ rights the government should be looking at where regulation has a positive […]

  2. Tweets that mention Cutting Statutory Sick Pay will increase the benefits bill, not employment | ToUChstone blog: A public policy blog from the TUC —
    Jan 10th 2011, 7:36 pm

    […] This post was mentioned on Twitter by R Gordon. R Gordon said: RT @TheRightArticle: Cutting Statutory Sick Pay will increase the benefits bill, not employment – – via @touchstoneblog […]

  3. Raymondoscaff
    Jan 16th 2011, 12:15 pm

    I was just off for 10 weeks with finger injuries, I work in Oil & Ga sector as a scaffolder,we contract to Oil the majors.
    I got just £ 68 pw SSP from my employer, what do think the consequences of this is??
    I’ll tell you, PEOPLE GO TO WORK I’LL OR INJURED!!!!!
    The only other benefit I got was council tax relief.
    I was not even told about the Employment and Support Allowance, I was told I could not claim anything;when asking at the benefits office, due to sick pay from my employer