The Labour Party’s ‘Make Work Pay’ document was published before the UK General Election saying that they would make changes to SSP in Great Britain via legislation (the now-published Employment Rights Bill).
This extends the employer liability to pay SSP and makes amendments to the regime outlined in the Social Security Contributions and Benefits Act 1992 as follows:
The Obligation to Pay
- The definition of a Period of Incapacity for Work (PIW) is amended to be 2 or more consecutive working days due to sickness. This is a change from the current PIW definition which is 4 or more calendar days
- If a PIW is formed, SSP will be payable from the first day. This is a change from the current situation where SSP is payable from the 4th day, providing that day is a Qualifying Day
The Rate of Payment
- The criterion to be earning at a rate of pay that must be equal to or above the Lower Earnings Limit for National Insurance is removed (£123 per week for 2024/25). Operationally, this means that all eligible employees, regardless of earnings, will be entitled to SSP, plus
- The rate of payment will be the weekly rate of SSP (currently £116.75 per week) or a prescribed percentage of the employee’s normal weekly earnings, whichever is lower
On 21 October 2024, the UK Government published a consultation asking only for views on the prescribed percentage to be used where an employee’s normal weekly earnings are less than the flat rate of SSP. On 04 March 2025, the UK Government published a response that concludes the Employment Rights Bill will set the prescribed percentage as 80% of normal weekly earnings.
For Bookkeepers
Note that the legislation will prescribe that an employer’s liability is the lower of:
- The weekly rate, currently £116.75; or
- 80% of normal weekly earnings
The responses document does address the fact that paying SSP to more workers will impose a cost burden, especially on small employers. However, there are no plans to allow employers a rebate scheme or restore the Percentage Threshold Scheme, only a commitment ‘to work closely with employees, employers and trade unions to develop and implement a system that is fair, supportive, and conducive to sustaining an inclusive, productive’.
