Covid-19 Time out Reforming Statutory Sick Pay to support the Covid-19 recovery phase 8 December 2020 Mike Brewer Maja Gustafsson In a pandemic, sick pay should play a crucial public health role, as well as providing income protection. But the UK’s Statutory Sick Pay is low by international standards, and misses out two million of our lowest-paid workers. Evidence suggests that this contributes to the low level of compliance with the legal obligation to self-isolate when instructed by NHS Test and Trace. The pandemic is showing the drawbacks of SSP, with its low levels of payment and its system of determining support – a historical hangover from our old contributory system – that means that low earners are entitled to nothing. In light of this, we recommend how sick and self-isolating workers should be supported through this pandemic. A simple way to support those who have to miss work would be to let employers use the Job Retention Scheme for workers who are ill with the virus or need to self-isolate, allowing them to receive 80 per cent of their previous earnings. This could cost around £314 million a month (with extra JRS payments of £426 million, and an offsetting £112 million saving in SSP) if 643,000 employees used the scheme. To shore up the statutory minimum, SSP should also be extended to all employees, by removing the need to have earned over £120 a week. Self-employed workers who need to self-isolate are currently directed to the Self-Employment Income Support Scheme (SEISS). This should be changed so that self-employed workers who have to self-isolate can claim grants covering 10 or 14 day periods of self-isolation. The Track and Trace Support Payments (TTSP) should be extended beyond 31 January, and entitlements granted to those who cannot work because their children cannot attend school. The Government should also review the formula for paying local authorities for discretionary payments so that it relates directly to local infection rates. Beyond the pandemic, we need to rethink this important part of the welfare state safety net, and ask questions about its generosity, recognising that its existence benefits us all.