A new prescription for Statutory Sick Pay: What changes in April 2026?

Significant reforms to statutory sick pay (SSP) will take effect on 6 April 2026. What do employers need to know?

Removal of Three-Day Waiting Period

One of the most notable updates is the removal of the three-day waiting period. From April 2026, employees will be eligible for SSP from the first day they are too unwell to work. The aim is to better support phased returns to work. For example, if an employee returns on reduced hours—working three days instead of their usual five while recovering—they may receive SSP for the remaining days they are unable to work.

This is a significant change and is expected to increase the volume of SSP claims that employers will need to process.

Wider Eligibility for Low‑Earners

The reforms also extend SSP eligibility for workers whose wages fall below the lower earnings limit. At present, employees must earn at least £125 per week to qualify. This will rise to £129 per week from April 2026. Under the new rules, lower‑earning workers who are currently excluded will become eligible for SSP.

New SSP Calculation

From April 2026, SSP will be payable at the lower of:

• the statutory flat weekly rate (increasing from £118.75 to £123.25 for 2026), or
• 80% of the employee’s normal weekly earnings, calculated using pay received during the eight weeks preceding the absence.

This revised formula is designed to provide a fairer approach across different pay structures, particularly benefiting workers whose earnings fluctuate from week to week.

Transitional Protection

To ensure employees already receiving SSP are not disadvantaged by these changes, the Government has introduced transitional protection. Employees whose entitlement would otherwise fall under the new rules will continue to receive SSP at the uprated flat rate, provided their sickness absence remains continuous.

This protection will end when one of the following occurs:

• the employee returns to work and the absence is not linked to the original illness;
• they reach the end of the 28‑week SSP entitlement;
• their employment contract terminates; or
• they become exempt under pregnancy‑related SSP rules.

Alongside these changes, April 2026 will also see the launch of the Fair Work Agency (FWA), which will in due course assume responsibility for overseeing and enforcing SSP compliance.

What These Changes Mean for Employers

These reforms are likely to bring both administrative and financial implications for employers. With SSP payable from the first day of absence and eligibility extended to a wider group of workers, employers can expect to process more claims, more frequently and potentially incur higher overall costs.

Government modelling suggests that removing the waiting period and expanding eligibility will cost businesses around £450 million per year, equivalent to approximately £15 per employee. While this represents a measurable increase, the policy is intended to provide greater financial security for employees during periods of illness, reduce presenteeism, and limit the spread of contagious conditions in the workplace.

Top Tips for Employers

With the reforms approaching, employers may wish to take several practical steps to prepare and ensure a smooth transition:

• Review payroll systems to ensure that they can administer SSP from day one and apply the revised eligibility criteria and calculation method.
• Update employment documents by removing references to the former three‑day waiting period and the previous earnings threshold. Employers should also review any company sick pay schemes to determine whether amendments are required.
• Assess the financial impact, particularly for employees whose SSP entitlement will be calculated at 80% of normal weekly earnings where this falls below the flat SSP rate.
• Plan budgets, accordingly, anticipating the potential increase in SSP‑related costs and higher number of eligible claims.
• Analyse sickness data to understand how the new rules may affect absence patterns, particularly shorter periods of sickness.
• Communicate the changes clearly to employees in advance so they understand how their entitlements will change.

Our employment team is available to support organisations in preparing for this change. If you would like to discuss how the reforms may affect your organisation, please contact our Employment Law team, who will be happy to help you navigate the evolving legal landscape.