Sick pay system is “broken” says TUC – but neither it nor a select committee’s proposals are good enough

Statutory sick pay has been in the spotlight. A group of MPs has criticised the government, saying the scheme is “failing” to provide a “safety net for workers” – and a trade union body agrees. However, neither of their proposals go far enough to tackle the issue.

Statutory sick pay: not enough to be a ‘safety net’

Statutory sick pay is currently just £109.40 per week – equivalent to just 17% of average earnings. Plus, there is a three-day waiting period before those eligible start getting it. This brings the amount for the first week for someone working a typical five-day week to £44, which is just 7% of average weekly earnings. The government is increasing it by 6.7% to £116.75 a week from April, in line with inflation.

However, the Work and Pensions Select Committee has issued a critical report about statutory sick pay.

As Sky News reported, the committee think statutory sick pay should go up to £172.48 a week – 27% of average earnings. It noted that:

The cross-party committee argued too that all workers should be eligible for SSP, not just those earning above the lower earnings limit of £123.

The committee’s chair Stephen Timms MP said:

Statutory sick pay is failing in its primary purpose to act as a safety net for workers who most need financial help during illness. With the country continuing to face high rates of sickness absence, the Government can no longer afford to keep kicking the can down the road on reform.

The Committee’s proposals strike the right balance between widening and strengthening support and not placing excessive burdens on business.

A growing number of workers are now classified as self-employed and a new contributory sick pay scheme for self-employed people would be a welcome step towards ensuring they are they are no worse off financially during periods of sickness than employees on SSP.

Not going far enough

General secretary of the Trades Union Congress (TUC) Paul Nowak said:

The Covid-19 pandemic showed that our sick pay system is in desperate need of reform. It beggars belief that ministers have done nothing to fix sick pay since.

It’s a disgrace that so many low-paid and insecure workers up and down the country – most of them women – have to go without financial support when sick. The committee is right that ministers urgently need to remove the lower earnings limit and raise the rate of sick pay.

Wider reform is also needed to remove the three days people must wait before they get any sick pay at all. Working people deserve better.

Analysis published by the TUC in January revealed that 1.3 million people do not earn enough to qualify for statutory sick pay – and 70% are women.

Zero-hours contract workers are eight times more likely than those on secure contracts (30.3% compared to 3.6%) to miss out on the benefit because they don’t earn enough to qualify.

However, neither the Select Committee nor the TUC are going far enough.

If, even with the committee’s recommendations, 1.3 million people would still only get payments worth 27% of average earnings this is still leaving people destitute in times of need. The committee, and the TUC, must do better and be bolder.

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