Statutory Sick Pay reforms — what’s changing?

Changes to Statutory Sick Pay (SSP) are due to come into effect from 6 April 2026 under the Employment Rights Act. Here, Daisy Dickenson explains what they are and what they’ll mean for employers. 

Improving financial protections for employees

The existing SSP system leaves large sections of the workforce without financial protection during illness. 

Up to 1.3m low‑paid workers earning below the Lower Earnings Limit (£125 per week for the tax year 2025/26) are excluded from SSP altogether and there’s no entitlement to SSP for the first three days of sickness absence. 

Around 25% of employees (which, under SSP legislation, may sometimes include workers) rely solely on SSP when they’re off sick — meaning that many receive no support for short‑term illnesses. 

What’s changing on 6 April 2026?

From 6 April 2026, entitlement to SSP will be reshaped and expanded under the Employment Rights Act (the Act). The three unpaid waiting days will be removed, so SSP will become payable from the first day of sickness absence. 

Additionally, the Lower Earnings Limit will be abolished, extending eligibility to employees regardless of earnings level — including many part‑time and lower‑paid employees who are currently excluded. 

Alongside this, the weekly rate of SSP is changing so that it’ll be the lower of the weekly rate specified in legislation and 80% of an employee’s normal weekly earnings. 

The Department for Work and Pensions has confirmed planned increases to several statutory payments from April 2026 including SSP, which will rise from £118.75 to £123.25 per week or 80% of an employee’s normal weekly earnings (whichever is lower).

Impact on employers

The reforms are intended to reduce financial insecurity, discourage employees from working while unwell and limit the spread of infectious illness at work — all while keeping employer costs proportionate.

The reform is currently estimated to result in an additional cost of approximately £15 per employee per year.

According to the results of an ACAS survey published in February 2026, both employers and workers considered that being paid sick pay from their first day of sickness would have the most impact. The SSP reforms will significantly broaden both the scope and frequency of SSP entitlement. 

By removing the Lower Earnings Limit, SSP will apply to a wider range of employees including part‑time employees, those with variable hours and individuals in lower‑paid roles who were previously excluded from the statutory regime altogether. This expansion is expected to increase the number of employees entitled to SSP and in turn the number of sickness absences that trigger statutory payment obligations.

The removal of the three unpaid waiting days represents a further structural shift. SSP will become payable from the first day of sickness absence, meaning that even very short periods of illness will give rise to SSP liability. For employees, this provides earlier income protection and reduces the financial pressure to attend work while unwell. For employers, however, it’s likely to increase both the volume and regularity of SSP payments, which may be a concern in workplaces where regular short‑term absence is considered to be an issue. 

Taking a more positive perspective, it’s hoped that fewer people will attend work while unwell, which will protect colleagues as well as clients and service users — particularly when employees are working with vulnerable people — and boost productivity while people are in work.

The introduction of an earnings‑linked SSP calculation for lower earners — capped at 80% of normal weekly earnings or the statutory weekly rate if this is lower — is intended to balance improved access to SSP with cost control. While this mechanism limits weekly payments for some employees, the overall financial exposure for employers is still expected to rise due to the removal of eligibility thresholds and waiting days. Employers may also face increased administrative complexity, as payroll systems will need to accommodate more frequent SSP payments and variable calculations alongside any existing contractual sick pay arrangements.

Beyond cost and administration, the reforms may influence absence management practices. With SSP payable from day one, employers may need to place greater emphasis on clear reporting procedures, consistent application of sickness policies and early engagement with employees during periods of absence. The changes may also prompt employers to review how statutory sick pay interacts with any enhanced contractual sick pay schemes, particularly where contractual terms currently mirror the previous SSP framework.

What next? Key steps for employers

1. Review employment contracts and sickness absence policies to ensure that references to SSP are accurate and have been updated to reflect the new position.
2. Provide updated guidance and training for managers on managing sickness absence, including accurate record‑keeping and identifying recurring or emerging absence patterns.
3. Check with payroll providers and your payroll team that systems are updated and capable of administering the revised SSP rules, including day‑one entitlement and earnings‑linked calculations.
4. Plan ahead on the basis that SSP isn’t reclaimable from HMRC, so increased uptake and earlier payment will translate into higher payroll costs. Evaluate the financial impact of the SSP changes and ensure that appropriate budgeting and forecasting are in place.
5. Employers offering enhanced or contractual sick pay should review contractual terms and policy documentation to ensure that these align appropriately with the revised SSP framework and assess whether amendments are required.

Talk to us

If you need advice on what these reforms mean for your organisation and how to prepare, we’re here to help.

Our award-winning employment lawyers can help you to navigate the Employment Rights Act with confidence, offering expert advice on everything from policy updates to manager training. 

Talk to us by calling 0333 004 4488, emailing hello@brabners.com or completing our contact form below.