UK Statutory Sick Pay April 2026 Reform Complete Guide

3 major changes effective 6 April 2026: (1) Lower Earnings Limit (LEL) abolished: previously workers earning under £125/week (~£6,500/year) were excluded. Now ALL employees eligible regardless of earnings. 1.3 million additional workers eligible. (2) Day-1 payment: SSP paid from day 1 of sickness, not day 4. Period of Incapacity to Work (PIW) reduced from 4 days to 1 day. NO unpaid "waiting days". (3) Lower payment for low earners: SSP = lower of 80% Average Weekly Earnings (AWE) or £123.25 / week flat. Higher earners get flat rate. Low earners get 80% of their AWE (cushion for low-paid workers). Employment Rights Act 2025 implementing.

From 6 April 2026 SSP = lower of: (a) 80% × Average Weekly Earnings (calculated over 8 weeks before sickness). (b) £123.25 / week flat cap (2026/27 statutory rate). Worked example A - low-paid part-time £100/week earner: 80% × £100 = £80/week SSP (lower than £123.25 cap = applies). Day 1 onwards. Previously got £0 (excluded by LEL). Worked example B - £200/week earner (low-paid full-time): 80% × £200 = £160 vs £123.25 cap = £123.25 applies. Worked example C - £500/week earner (median): 80% × £500 = £400 vs £123.25 = £123.25 flat rate. Worked example D - £1,500/week earner (high): 80% × £1,500 = £1,200 vs £123.25 = £123.25 flat rate. SSP capped low: high earners take big proportional pay hit during sickness. Many employers offer enhanced sick pay schemes above SSP.

Pre-April 2026: PIW = 4+ consecutive days of sickness. First 3 days = "waiting days" (unpaid). SSP only paid from day 4 onwards. From April 2026: PIW = 1+ day. Day 1 SSP payable. No waiting days. Practical impact: (1) Worker with 2-day sickness: Pre-2026: £0 (PIW not triggered, no SSP). Post-2026: £246.50 for 2 days (assuming flat rate). (2) Worker with single-day sickness: Pre-2026: £0. Post-2026: 1 day's SSP. (3) Worker with 1-week sickness: Pre-2026: 4 days × £20.5 daily (£82). Post-2026: 5 days × £24.65 daily (£123.25). Linking rule still applies: PIWs within 8 weeks treated as continuous. Maximum 28 weeks SSP per PIW: unchanged.

Employer pays SSP from own funds + cannot reclaim from HMRC for typical staff. Small Employer Relief (SER) abolished historically: no current reclaim mechanism for most. Employer cost: (1) SSP wages: £123.25 × weeks paid. (2) Plus Employer NI 15%: on SSP payment. (3) Plus admin / payroll cost. (4) Plus replacement cover cost where needed. Government estimate: average employer cost +£15/employee/year under new regime. Total UK economy: +£450m/year. Class 1A NIC: SSP is "qualifying earnings" - subject to Employer + Employee NI normally. Sectoral impact: (1) High part-time / casual: hospitality, retail, care - largest impact. (2) Low-paid sectors: previously many staff excluded by LEL. (3) Higher-paid professional sectors: minimal change (most enhanced sick pay anyway). (4) Gig economy: depends on employment vs self-employed status.

Workers already on SSP as at 6 April 2026 retain old-regime protection: (1) Those earning £125-£154.05/week and currently on SSP: continue receiving 2025/26-style flat-rate SSP (uprated) for the continuing PIW. (2) New PIW starting 6 April 2026+: new regime applies. (3) Linked PIWs spanning 6 April 2026: complex - check employer payroll guidance. (4) Most employers paying enhanced contractual sick pay: contractual continues regardless of statutory minimum changes.

Self-employed NOT eligible for SSP. Class 2 NI contributions previously qualified for SSP: change pending. Self-employed sick pay options: (1) Personal income protection insurance: pre-arranged + best for income replacement. (2) Universal Credit: if no other income + circumstances. (3) ESA Employment + Support Allowance: contributory if sufficient Class 2 NI history. (4) Income-based ESA: means-tested. (5) PIP Personal Independence Payment: if longer-term disability + qualifies. Universal Credit + SSP interaction: (a) UC reduces with SSP income: 55p taper per £1 net. (b) UC + SSP combined typically near low-paid sustainable floor. (c) Apply to UC immediately when sickness starts: backdated possible.

SSP maximum 28 weeks per PIW: unchanged. After 28 weeks: (1) Employer issues SSP1 form: notifies end of SSP. (2) Employee can claim ESA + UC: from week 29. (3) Long-term sick consider PIP: separate disability benefit. (4) Employment continues: but unpaid by employer beyond contractual sick scheme. (5) Capability dismissal possible: after fair consultation process. Long-term sick rights: (a) Reasonable adjustments (Equality Act 2010): phased return, flexible hours. (b) Occupational Health referral: employer assessment. (c) Permanent Health Insurance / Group Income Protection: many employers carry. (d) State Pension Top-Up via NI credits: Limited Capability for Work credits while on ESA.

SSP is statutory FLOOR: many employers offer enhanced contractual sick pay above. Common contractual schemes: (1) Full pay 4-26 weeks then half pay 4-26 weeks: typical professional sector. (2) Full pay 13 weeks then nothing: standard mid-size company. (3) 6 weeks full pay + 6 weeks half: smaller employers. (4) NHS / public sector: 6 months full + 6 months half typical, increasing with service. (5) Hospitality / retail: often SSP only (no enhancement). Check employment contract: specific entitlement. Length of service usually affects entitlement. Trade union collective agreements: often more generous. Strategic considerations: (a) Job interview - ask about sick pay: often overlooked. (b) Switching jobs: probation period may have minimal entitlement. (c) Long service: typically increases entitlement.

Employee checklist: (1) Understand your entitlement: SSP minimum + any contractual enhancement. (2) Notify employer immediately when sick: per contract. (3) Self-certification first 7 days: SC2 form. (4) Fit note (formerly sick note) from GP after 7 days: required. (5) Day-1 SSP from April 2026: no waiting days. (6) AWE calculation correct: 80% of average weekly earnings over 8 weeks before sickness. (7) Linked PIWs within 8 weeks treated as continuous. (8) Maximum 28 weeks SSP per PIW. (9) SSP1 form when SSP ends: trigger ESA / UC claim. (10) Personal income protection insurance for high earners: critical above £30k salary. Employer checklist: (11) Update payroll software for April 2026. (12) Day-1 calculation logic. (13) 80% AWE vs £123.25 lower-of comparison. (14) Reciprocal sick pay scheme consideration. (15) Class 1A NIC on SSP. (16) RTI reporting of SSP via FPS. (17) Sick pay policy update + employee communication. (18) Occupational Health partnership for long-term cases. (19) Reasonable adjustments process. (20) Annual review: SSP regime + statutory rate changes.