Expert view: Changes to Statutory Sick Pay - what you need to know

Samantha O’Sullivan, CIPP policy and advisory lead, reviews the confirmed changes to Statutory Sick Pay (SSP) being brought about by the Employment Rights Bill.

To understand more about our members’ and the pay industry’s views on strengthening SSP, the Department for Work and Pensions (DWP) and the Department of Health and Social Care joint work and health directorate reached out to the Chartered Institute of Payroll Professional’s (CIPP) policy team as they began to move forward with key policy decisions.

We held think tanks with CIPP members to understand their thoughts on the questions posed within the consultation, which ran until December 2024. Key points raised included:

The removal of the waiting days was seen as a positive step to reducing administrative burdens for payroll professionals. It simplifies the SSP process and removes sometimes onerous calculations and risks of non-compliance.
The cost to employers was raised, which is unsurprising within the context of recent changes announced to employer National Insurance contributions and increases to the National Minimum Wage and National Living Wage. It’s therefore important to balance the need of impacted employees with the impacts on employment.

So, what changes are coming into play?

The DWP published its consultation response at the start of March 2025 (CP 1275 – Making Work Pay: Strengthening Statutory Sick Pay), in which it announced the changes being made to SSP. These changes have been reflected in the Employment Rights Bill, which is still making its way through the parliamentary process. However, the government confirmed in its Implementing the Employment Rights Bill roadmap, that these changes are due to be introduced from April 2026.

The two changes we’ll see are as follows:

SSP will be payable from day one of sickness
SSP will be payable to those earning less than the lower earnings limit (LEL).

Let’s look at these in closer detail…

1. SSP from day one

SSP will now be payable from day one of sickness. This new measure means employees will take the time off work when they need it the most, at the start of sickness, to ensure they can rest, recover and get back to work sooner. Most importantly, they’ll be entitled to SSP for that period.

When speaking to CIPP members, concern was raised around the misuse of “Blue Mondays”, or a “Christmas shopping day” once employees get paid from day one of sickness. This is a valid concern, and one which needs to be considered when looking at company policies and staff handbooks.

There have been questions around the period of incapacity to work (PIW), and whether this is being removed, or amended. DWP has confirmed to industry experts that:

“As part of the Employment Rights Bill, we are amending the Period of Incapacity for Work (PIW) so that it commences from the first day of a sickness absence. It will continue for the purposes of linked periods, etc.”

2. SSP paid to those under the LEL

The consultation has confirmed that SSP will be paid to those earning under the LEL, and this will be paid at 80% of an employee’s normal weekly earnings, where 80% of their normal weekly earnings is less than the flat rate of SSP. 

This does mean that for some employees who earn at, or slightly above the LEL, they will in fact be paid a lower weekly rate of SSP than before. The DWP stated that the balance comes from the removal of the waiting days, meaning these employees may be paid less per week, but they’ll be paid from the first day of absence. In the consultation response, it states:

“An employee earning an average of £125 and working two days per week (approximately 5 hours per day at National Living Wage) would cumulatively be entitled to more SSP for the first 9 weeks of a sickness absence.”

This is a poignant place to clarify that, even though the rules of SSP are changing, and this is the statutory minimum an employer must pay their employees, employers have the right to pay occupational or company sick pay to their employees, if they so wish.

What do employers need to do ahead of the changes?

The CIPP advises employers and agents to review sickness policies and procedures now ahead of the April 2026 change, especially if they have contractual sickness policies in place, to ensure policies reflect the change in entitlement to SSP. The CIPP’s stance is SSP will always be paid first, with any contractual sick pay paid as a top-up, to take an employee back to full pay.

Employers and agents should also review the rate of sickness taken by those earning under the LEL, to forecast for budgets. The value of SSP paid to employees may increase, especially if the workforce is primarily low earners, earning under the LEL.