Major Overhaul of Statutory Sick Pay Announced for 2026
The Labour Party government has announced a significant change to sick pay regulations that will affect employees across the country. From 6 April 2026, Statutory Sick Pay (SSP) will undergo a fundamental transformation in how it is calculated and distributed.
Universal Eligibility Regardless of Earnings
One of the most notable changes is that SSP will become available to all eligible employees, regardless of their earnings. This marks a departure from previous rules where employees earning below the Lower Earnings Limit (LEL) were excluded from SSP entitlements.
The new system will feature several key changes:
- SSP will be payable from the first full day of sickness absence
- Payment will be calculated at 80% of an employee's average weekly earnings (AWE)
- Alternatively, a new flat rate of £123.25 per week will apply, whichever amount is lower
Transition Rules for Existing Sick Leave
The government has established specific transition rules for employees who are already on sick leave when the new system takes effect. These rules determine eligibility based on when the sickness absence began.
Employees will be entitled to SSP from 6th April 2026 if:
- Their sickness absence started on or after 22 September 2025
- Their sickness absence started before 21 September 2025, but they returned to work between 22 September 2025 and 5 April 2026
However, employees will not be entitled to SSP from the implementation date if their sickness absence began on or before 21 September 2025 and continued without interruption until 5 April 2026. This rule also applies to any linked sickness absence that continues beyond 6 April 2026.
Waiting Days Eliminated
Under the new regulations, waiting days that previously applied under the old rules will no longer be relevant from 6 April 2026. Importantly, SSP will not be paid for any waiting days that occurred before this date.
The government has provided specific guidance for employees who restart sickness absence just before the implementation date:
- If sickness absence restarted on 4 or 5 April 2026 and continues beyond 6 April 2026
- For absences lasting 3 days or less: SSP is only paid for qualifying days on or after 6 April 2026
- For absences lasting 4 days or more: SSP is paid for any qualifying days from the first day of the restarted sickness absence
Payment Rate Adjustments
Employees already receiving SSP before 6 April 2026 will transition to the new payment rates from the implementation date. A special provision applies to employees whose average weekly earnings would result in a reduced SSP rate under the new calculation method.
These employees will receive the new flat rate of £123.25 instead of 80% of their AWE if:
- They earn between £125 and £154.05 per week
- They were receiving SSP before 6 April 2026
- They remain off sick on the implementation date
This adjustment continues until the employee returns to work or their SSP entitlement ends. Once an employee returns to work after 6 April 2026 and subsequently goes off sick again, they will receive 80% of their AWE for that new absence, even if it is linked to a previous period of sickness.
The Labour government's changes represent the most significant reform to sick pay regulations in recent years, aiming to provide better protection for workers during periods of illness while simplifying the eligibility criteria for employers and employees alike.
