Up until April this year, statutory sick pay in the UK was £99.35 per week.
Critics argued this low level of SSP – the lowest rate of 38 OECD nations – contributed to the severity of the pandemic’s local impact and to rates of long Covid.
The Trades Union Congress suggested this led to low rates of self-isolation.
In response to this criticism, the government increased the level of statutory sick pay to £109.40 per week in April.
Bill McGregor, Principal of BMG Accountants and Tax Advisors, says while this increase was a welcome change, it isn’t substantial enough to make a significant difference to individuals and businesses.
“The level has only increased by 2-3 per cent so it’s a really small increase, especially when you consider that inflation and cost of living is very high in the UK. It’s a really tough economic climate.”
A global comparison of statutory sick pay
Historically, statutory sick pay in the UK has always been low compared to the rest of Europe, says McGregor.
“If I look back at the years I’ve worked in accountancy, it’s always been around this level. The government has traditionally seen statutory sick pay as a cost. That’s definitely been the mindset which is hard to change. They’ve always taken quite a short-sighted approach.”
Sources: Big Issue, 2023, euronews, 2023, Citizensinformation, UK Government
Statutory sick pay in the spotlight
Although the UK’s low rate of statutory sick pay is a long-standing concern, COVID has pushed the issue to the forefront.
“The low level of statutory sick pay made it very hard for people to take time off. And there are still people suffering from long COVID who need to take sick leave,” says McGregor.
“The low benefit often encourages people to return to work sooner than they should. When people come back and they aren’t feeling 100%, that impacts the working environment. It reduces productivity and people aren’t working at their usual capacity.
“It’s really difficult for a small business with one or two employees to pay sick leave. And it’s hard for them to operate when they have someone out of work for a long period of time. It’s really costly for a small business,” says McGregor.
Small registered limited companies fell between the cracks during COVID, says McGregor, with many being one-person outfits.
“Most of them didn’t receive any government support in terms of sick benefits during the pandemic.”
During COVID, small businesses adopted a range of strategies to manage sick leave absences.
“Business owners often worked extra hours. Many asked their staff to work extra hours. Some brought in part-time or contract staff. It really varies from business to business, but what they really all need is for the statutory sick pay level to be increased in line with other countries,” says McGregor.
“Governments could make it a lot easier for business owners by compensating them for a greater proportion of sick pay. They could look at applying a deduction against the employer’s tax and insurance.”
Under the current system, accountants can support businesses by helping them to navigate a complex process.
“A lot of employers struggle to do the calculations themselves because the system is a lot more complex than it really should be,” says McGregor.
“We look after payroll for a number of clients. Our main role is to process the payroll but because HR and payroll can be such a minefield, we find a lot of clients ask questions. We do a lot more than just processing payroll.
“Since COVID, small businesses have required a lot more assistance, especially in payroll. A lot of accountants carry out payroll services for their clients. Businesses that don’t use an accountant will often forgo accessing statutory sick leave because it’s so time-consuming. The rate really needs to be increased and the process simplified.”