Fri, 1 Apr 2011

Proposal to replace SSP with insurance

Statutory Sick Pay (SSP) could be replaced by health insurance if the Government approves recent recommendations, but HR leaders warn the reform could leave employees out of pocket.

Proposals published by the think tank Demos last month claim a system of personal welfare insurance through National Insurance rebates would increase the number of employees returning to work after long-term sick leave.

It says profit incentives for insurance providers would encourage early intervention for individuals on SSP and reduce numbers of employees moving onto Employment Support Allowance by 43%.

But Ben Willmott, senior public policy advisor at the Chartered Institute of Professional Development, warned the system might leave employees unpaid.

‘Long-term absence is not such a problem, but if you recognise that much absence is short-term for periods of less than one month or recurring absence, how quickly would the insurer pay out?’

Employee absence currently costs employers an average £517 per employee each year in lost production, Statutory Sick Pay and overtime costs.

Lord Freud, minister for welfare reform, confirmed the recommendations will be included in the Government’s independent sickness absence review, which is due for publication in autumn this year.