Statutory Sick Pay U-turn ‘could not come at a worse time’ as NI hike plans are shelved

Rishi Sunak discusses Statutory Sick Pay with Martin Lewis

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Statutory Sick Pay rates came into focus over the last year or so as coronavirus impacted millions of people’s employment set ups. Yesterday, the DWP and Department of Health and Social Care released the outcome of a consultation on proposals to reduce ill-health related job losses.

On SSP specifically, the following was detailed: “The consultation sought views on reforming SSP so that it is available to all employees that need it, more flexible in supporting returns to work, and underpinned by a suitable enforcement framework.

“In response to COVID-19, Government has introduced a series of unprecedented measures to ensure that individuals and businesses have access to the support they need. Access to SSP has been a key part of this response.

“Government extended eligibility of SSP to employees who were self-isolating in line with public health advice, ensuring that eligible employees were not without this financial protection.

“We also introduced the Coronavirus Statutory Sick Pay Rebate Scheme, which supports small and medium sized businesses throughout the country to manage the increased costs of covid-related absences, and we temporarily suspended waiting days which made SSP payable from the first day of a coronavirus-related sickness absence.”

As SSP became crucial for many, a number of charities and experts called on the Government to increase its rates, which is currently capped at £96.35 per week.

However, yesterday the Government confirmed no changes will be forthcoming for the foreseeable future, as it explained: “The consultation posed several important questions on the future of SSP which require further consideration.

“Government maintains that SSP provides an important link between the employee and employer but that now is not the right time to introduce changes to the sick pay system.”

This news was condemned by Dame Clare Moriarty, the Chief Executive of Citizens Advice.

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Ms Moriarty said: “Today’s announcement is a U-turn on the Government’s commitment to improve sick pay and support people on low incomes.

“With cases of coronavirus rising and many needing to self-isolate, it could not come at a worse time.

“We’d urge the Government to think again. Otherwise many will continue to face an impossible choice: work when ill or fall behind on their bills.”

This will unlikely be the only issue the Government will face pressure on at the moment as reportedly, the state has shelved social care reform plans until the Autumn.

This comes as the Government faced a huge backlash following reports it was planning to potentially raise NI rates in a bid to cover rising benefit costs.

Rachael Griffin, a tax and financial planning expert at Quilter, responded to these developments.

Ms Griffin said: “Levying an additional penny in the pound on national insurance to pay for social care without asking those still working over state pension age to contribute would have driven a bus through any notions of intergenerational fairness.

“It’s therefore no surprise given the backlash witnessed yesterday that the Government has put social care reform back on the shelf for a while yet, most likely till after the summer recess.

“Almost a year ago to the day, the government was rumoured to favour proposals to make everyone over-40 pay more in income tax or national insurance to pay for social care.

“That plan has clearly gone out of the window given it simply won’t raise the amounts required.

“Instead, the under-40s could now potentially be asked to dig deep to front the cost of social care, without the non-working population paying an extra penny.

“Removing the national insurance exemption for those above state pension age won’t raise that much in the grand scheme of things, but it would at least make it seem that everyone is in the same boat.

“Whatever the proposed solution, it looks like we’ll have to wait a while yet to find it out. It could be a case of going back to the drawing board on funding, potentially with an additional one percent hike in income tax rather than national insurance which will alleviate concerns that it would hit low-earners and those working under state-pension age the hardest.”

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