Two million low-paid workers may for the first time be entitled to statutory sick pay under proposals that the government hopes will also encourage more people with disabilities and long-term conditions back into work.

About 100,000 people every year fall out of work completely after a sickness absence, according to the Department for Work and Pensions and Department of Health and Social Care, which are jointly putting forward the proposals for consultation. Nearly half (44%) of those who are off work because of illness for a year do not return to the workplace.

The proposals include money for small businesses in the form of a sick pay rebate, so that they can help people with disabilities and those with long-term conditions get back to work when they are ready.

“I want Britain to be an environment where disabled people and those with health conditions can thrive, not just survive – not only in work but every area of their lives,” said the work and pensions secretary, Amber Rudd.

“With three in five employers facing challenges when supporting employees to return to work, it’s time that we took a closer look at how businesses can retain staff. Good work is good for our mental and physical health, and by working closely with employers we can help prevent the loss of talent when people unnecessarily leave the workplace.”

Long-term chronic conditions, from type 2 diabetes to heart problems, are on the rise as people live longer. Obesity and excess weight are partly responsible for a steady increase in chronic ill health. People with mental health conditions also frequently struggle for support at work. There are 12.7 million people of working age in the UK with a long-term health condition.

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“These people are at greater risk of falling out of work, and once people fall out of work the barriers to returning are high. But with the right support and adjustments in place, many could remain in employment,” said a DWP spokesperson.

The lowest paid people in Britain are not currently eligible for sickness benefit. Statutory sickness pay is only for those who earn more than £118 a week. Two million people, most of whom will be part-time workers, earn less than that.

The consultation will seek views on the level and duration of statutory sick pay, which risks being a disincentive to returning, says the DWP.

“If someone currently earning below the lower earnings limit were given the full rate of SSP, it is likely that this would be above what their weekly wage is. If they can get the same amount or more from staying off work then this removes the incentive for employees to return to work. It is a balance between supporting this group when they are off work sick while also providing an incentive for them to return to work,” said the spokesperson.

The proposals will include statutory guidance to employers to take “early, proportionate and reasonable steps to support an employee to return to work, before dismissing them on health grounds”. Employees will have a right to request modifications to the workplace on health grounds. Employees will be encouraged to raise issues, and employers to accommodate them where possible.

“Too many still face challenges returning to work after sick leave. We need to remove the barriers that stop people with disabilities or health conditions from reaching their full potential – these steps will help us achieve that,” said the health secretary, Matt Hancock.

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“Businesses will also benefit from being able to retain talent and build workplaces that support the physical and mental health needs of their employees.”

Matthew Fell, the CBI’s chief UK policy director, said: “Managing sickness absence effectively and reducing it through proactive health and wellbeing initiatives and policies makes good business sense. Where this helps disabled people to contribute their best at work it can also be an important part of employers’ diversity and inclusion efforts.

“With the UK’s productivity performance under the spotlight, many employers know that a well thought out health and wellbeing strategy can help boost performance and make their company a better place to work.

“Adding greater flexibility to statutory sick pay so it supports mental as well as physical health makes sense, and reflects the reality that one in four people will experience such an illness each year.”



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