UK businesses face a significant shift in employment costs next month as the government axes a key pandemic-era support scheme, marking the end of an era of state-backed sick pay relief that has helped employers weather unprecedented workforce disruption since 2020.
From 6th April, the Statutory Sick Pay (SSP) Rebate Scheme will cease entirely, meaning employers can no longer reclaim up to two weeks of sick pay for COVID-19 related absences. This temporary lifeline, which allowed small and medium-sized businesses to recover costs during the height of the pandemic, represents the latest in a series of support measures being wound down as the government declares a return to business as usual.
In practical terms, this means every employer—from corner shops to mid-sized manufacturers—will once again shoulder the full financial burden of employee sick leave. For smaller businesses operating on tight margins, this could translate to hundreds or thousands of pounds in additional costs annually, depending on their workforce size and absence rates.
The changes don't stop there. The weekly rate of Statutory Sick Pay will also increase, albeit modestly, from £108.85 to £109.40—a rise of just 55 pence that reflects broader inflationary pressures on statutory benefits. Employees must still earn at least £123 per week to qualify for SSP, with payments available for up to 28 weeks for those unable to work due to illness.
The Department for Work and Pensions, which oversees SSP regulations, has emphasised that these changes represent a deliberate move away from exceptional pandemic support towards established employment law. However, the timing has drawn criticism from business groups already grappling with rising wage costs and economic uncertainty.
For employers, particularly smaller enterprises that benefited most from the rebate scheme, the changes will require careful financial planning. HR departments are being advised to review their absence management policies and budget projections, whilst ensuring they maintain the required three-year records of all SSP payments—a legal obligation that remains unchanged.
The shift underscores the government's broader strategy of dismantling COVID-era business support, following similar moves to end furlough schemes and other emergency measures. For many employers, it marks the final step in the transition back to pre-pandemic operating conditions.