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Statutory Sick Pay

Volume 77: debated on Thursday 18 April 1985

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asked the Secretary of State for Social Services how his Department's calculation, published in the report by the Comptroller and Auditor General on statutory sick pay HC45, that employers would pay out £615 million in statutory sick pay in 1983–84 was made; how it was calculated that this would be £480 million more than would have been paid out through occupational sick pay schemes; and what is the estimated figure for the extension of statutory sick pay to 28 weeks.

The figure of £615 million is based on an estimate of the number of weeks for which sickness benefit would otherwise have been paid plus an addition for married women and widows paying reduced rate contributions who were not eligible for sickness benefit but would be eligible for statutory sick pay. The figure of £480 million (£525 million when additional national insurance contributions are taken into account) represents the amount of extra sick pay it was estimated employers would pay out in the first full year of the SSP scheme compared with their previous payments of occupational sick pay. It is less than the total SSP paid out because employers who paid full pay to their employees when sick would not have paid out anything extra when SSP was introduced; while for employers who paid full pay less sickness benefit, the additional costs of SSP were assumed 23,000 to be those of making sick pay up to full pay. More information about the way in which the estimates for SSP were calculated is given in the DHSS paper "Financial Effects of Statutory Sick Pay" dated April 1982. I am arranging for a copy to be placed in the Library.It is not possible to make reliable estimates of the 33,150 additional costs to employers when SSP is extended to 28 weeks, because we do not have information on how much employers currently pay out in occupational sick pay for extended periods of sickness.