Sickness can be costly – if you work for yourself then days lost to being ill can seriously affect your income. And if you’re employed, accessing your sick day allowance can be confusing and you may feel pressure not to take it. Britons were absent from work for an average of 4.3 days in 2016 and roughly 137 million working days were lost to illness and injury. Coughs and colds, as well as musculoskeletal problems accounted for the largest numbers of sick days taken. Whether serious or minor, illness is a part of life for all of us – it’s better to be prepared and aware of any rights and entitlements you have than without a plan.
Sick pay when you’re employed
If you work for someone else then you’re likely to be better covered for sick days than working for yourself. Most employers have their own internal sick pay scheme, which provides the workforce with a set number of days of cover per year. Even if an employer doesn’t have a company sick pay scheme, they are still required to pay Statutory Sick Pay (SSP) to employees who qualify.
Company sick pay schemes
Company sick pay (also called contractual or occupational sick pay) covers entitlement to paid time off for sick employees. These schemes are usually more generous than SSP so it’s worth investigating whether you are entitled to benefit from one at work. Entitlement is normally set out in an employment contract or statement of employment particulars. Employers are required to provide this within two months of an employee starting work – or to notify that there is no company sick pay scheme if that’s the case.
There is no set template for a company sick pay scheme other than that the sick pay offered must not fall below the SSP minimum. Most employers require their staff to have fulfilled a minimum period of service before being able to benefit from a company sick pay scheme. Normally, this entitlement kicks in at the end of any probationary period. So, how does it work?
Proof of sickness – employees are usually required to notify an employer of sickness. In most cases, you can self-certify for up to a week and after that will need a note from a doctor.
Sick pay – most company sick pay schemes will offer full pay up to a set number of weeks of sickness. After that the entitlement drops to half pay.
Discretion – many employers write in an element of discretion to a sick pay policy. This allows them to pay an employee sick pay even if they have not completed a probationary period. It also means an employer may refuse to pay if they don’t believe that there is a good reason for being off work.
Statutory sick pay (SSP)
Even if your employer doesn’t have an occupational sick pay scheme you are still entitled to SSP if you qualify. To qualify you must be:
Classed as an employee – i.e. with an employment contract. Zero hours workers, part time employees, agency and fixed term contract staff are included in this category.
Earning at least £112 (before tax) per week
Sick for at least four days before you claim
For employees who qualify, SSP is £88.45 per week for up to 28 weeks. Employers can’t pay less than this statutory minimum – although under a company sick pay scheme they may offer more.
Sick pay when you’re self-employed
If you work for yourself then you’re not entitled to SSP and you don’t benefit from a company sick pay scheme. However, there are ways of making sure that time off work through illness doesn’t’ leave you struggling.
Employment and Support Allowance (ESA)
If you’re ill and unable to work, ESA offers financial support, including to those who are self employed. Anyone under state pension age who isn’t receiving SSP, Statutory Maternity Pay or Jobseekers Allowance is eligible for ESA. The level of financial support depends on your circumstances and income, and a Work Capability Assessment will be carried out to establish how an illness is affecting your ability to work.
Income protection insurance
For most self employed people the reality is that it’s up to you to provide for any periods in your life when you can’t work, usually by taking out insurance. Income protection insurance provides a monthly payment if you’re not able to work as a result of sickness. It is designed to cover essential outgoings, such as rent or mortgage and monthly bills. The payments are tax-free and provide long-term earnings cover, normally right up to retirement. Although it’s always important to read the small print to check for exclusions a good income protection insurance can help to tide you over if you’re self employed. Most will cover a wide range of conditions, including stress, cancer and heart disease.
Alex Hartley is a keen advocate of improving personal finance skills. She's worked at Solution Loans since 2014 and written hundreds of articles about how people can manage their money better. Her interest in personal finance goes way back to...Read more about Alex Hartley