The Employment Rights Act 2025, which received Royal Assent in December, introduces significant reforms to Statutory Sick Pay from 6th April 2026. These represent the most substantial changes to SSP since the system was revised in 1985, and employers across the supply chain need to understand the implications.
Three Key Changes
The Lower Earnings Limit will be removed entirely. Currently, employees must earn at least £125 per week to qualify for SSP. From April, all employees will be eligible regardless of their earnings level, extending coverage to an estimated 1.3 million additional workers.
SSP will be calculated differently. Rather than the flat rate alone, employers will pay whichever is lower: 80% of the employee’s average weekly earnings, or the uprated flat rate of £123.25. Average weekly earnings are calculated over the relevant eight-week period prior to absence.
Waiting days are being abolished. Currently, the first three days of sickness are unpaid. From April, eligible employees will receive SSP from their first qualifying day of absence.
Transitional Protections Confirmed
The DWP has now clarified how these changes affect employees already off sick when the new rules take effect. Those already receiving SSP before 6th April 2026 will be transitionally protected to prevent any reduction in their payments. They will continue to receive the uprated flat rate of £123.25 until they return to work, exhaust their 28-week entitlement, or their contract ends.
Employees who are serving waiting days on 6th April will become entitled to SSP from that date onwards. Those earning below the current LEL who are off sick on or after 6th April will become eligible for SSP under the new rules.
Practical Implications
Payroll teams should confirm with software suppliers when systems will be updated for the new 80% calculation. Policies referencing waiting days will need revision. Employers with occupational sick pay schemes should review whether these mirror current SSP rules and adjust accordingly.
The reforms represent a fundamental shift toward broader worker protection. Understanding the details now will ensure compliance when the changes take effect.
