The Department for Work and Pensions (DWP) has enacted a significant overhaul of the Statutory Sick Pay (SSP) system, a move set to extend financial protection to an estimated 1.3 million low-paid workers across the United Kingdom.
What Are The Key Changes?
Central to the reform is the abolition of the Lower Earnings Limit. Previously, employees had to earn a minimum amount per week to qualify for SSP. This rule change, effective from the announcement on 16 January 2026, ensures that all employees, regardless of their weekly earnings, will now be eligible for statutory sick pay.
Furthermore, the government is eliminating the three waiting days from the system. This means eligible employees will be entitled to receive SSP from their first full day of sickness absence, rather than having to wait until the fourth day as was previously the case.
How Much Will Employees Receive?
The rate of Statutory Sick Pay will now be calculated as 80% of an employee's earnings or the current flat rate, whichever is lower. This represents a shift towards a more earnings-linked model for many.
The DWP stated that these changes will provide a crucial form of financial security during sickness absence for those previously excluded. They noted that around 25% of all employees rely solely on SSP when ill, and these individuals will now benefit from payments starting on day one.
Enforcement and Business Impact
Another key element of the reform is the integration of Statutory Sick Pay enforcement within a newly established single enforcement body, the Fair Work Agency. This body will handle the existing disputes and enforcement processes related to SSP.
The changes come with a cost to businesses, estimated by the DWP at an additional £450 million annually. This breaks down to approximately £15 more per employee each year to cover the removal of waiting days and the Lower Earnings Limit with the 80% rate.
A DWP spokesperson said: "The changes we are bringing in through this Act mean up to 1.3 million low-paid employees will now be entitled to Statutory Sick Pay and all eligible employees will be paid from the first day of sickness absence, benefitting millions of employees." They added that those needing further support could explore the wider welfare system and confirmed the rate would be reviewed annually.
