Unfortunately, there are significant financial issues to take into consideration when you are off work sick. Finances can become stretched, income can reduce significantly over time therefore it is very important to be aware of your rights and how to obtain the correct level of sick pay.

While the chances are your employer will be up to speed with sick pay regulations and any additional payments due, it does no harm to check these payments are correct.

Two different types of sick pay

When looking at sick pay, you will usually come across two main types:

• Statutory Sick Pay (SSP)

SSP is the minimum sick pay your employer must pay if you are eligible. At the time of writing, SSP is paid at the lower of £123.25 a week or 80% of your average weekly earnings.

Since 6 April 2026, SSP can be paid from the first day of sickness absence, and there is no longer a minimum earnings threshold. If you are eligible, SSP can be paid for up to 28 weeks.

• Contractual/Occupational sick pay

Some employers offer contractual sick pay in addition to SSP. This may provide a higher level of pay, or continue for longer, depending on your employment contract, staff handbook or workplace sickness policy.

Your employer can offer more than the statutory minimum, but they cannot pay less than the SSP you are legally entitled to receive.

Check your employment contract

It is important to check your employment contract. Not only for any additional sick pay but also the process for reporting illness to your employer. In the event that you fail to follow procedure, your employer has the option to reduce any SSP/contractual sick pay for the disputed period. For example, if you fail to report an illness then the period between your illness and reporting to your employer may effectively be ignored.

If there are additional sick payments written into your employment contract, staff handbook or details on your employer’s intranet, your employer is obliged to honour these payments. Failure to do so is a breach of the contract and should be brought to the attention of your employer.

Entitlement to benefit payments

Many people fail to realise that you may be entitled to benefit payments in the event that your income has been reduced significantly as a consequence of illness. This may include payments such as-

• Housing benefit
• Universal credit
• Council tax reduction
• Pension credits
• Employment and support allowance

In this situation it is very important to take advice as soon as possible and begin applying for additional eligible benefits.

Personal Independence Payment (PIP)

The PIP benefit has attracted a degree of controversy over the years, replacing the previous Disability Living Allowance. You may be eligible if your illness:-

• Has made daily living/getting around difficult for the previous three months
• If these difficulties are expected to continue for a minimum of nine months

Most of the controversy over PIP surrounds the eligibility process which has even attracted court challenges. While it can prove challenging to secure PIP benefits, this does not mean you should dismiss this option.

Increase in existing benefit payments

Whether you are looking at tax credits or any other benefit payments, a significant reduction in your income could potentially increase your entitlement.

It is worth contacting the benefit department to advise them of the change in your circumstances. They will review your situation and inform you of any additional benefit payments for which you may be eligible. If you don’t ask the question, you will never receive any additional payments!

Request a tax refund

One of the more common overlooked payments regarding long-term illness is that of a potential tax refund. While you will still be liable to tax and national insurance on your SSP, you may see a significant reduction in your annual income. As a consequence, there is every chance that you may be eligible for a tax refund.

As HMRC receive all of your remuneration figures, in the event that you are due a tax refund this will be automatically forthcoming at some point. However, there is nothing stopping you contacting HMRC directly and requesting your tax refund.

Using your holiday pay to supplement your income

There are two things to consider when it comes to holiday entitlement during periods of illness:-

• Even during your period of illness your holiday entitlement will increase
• You can choose to take paid holidays during periods of illness

This prompts the question, why would you choose to take holidays when you can receive SSP and any other additional contractual sick pay?

When it comes to SSP, this is paid for a maximum of 28 weeks although contractual additional sick payments do vary. If your SSP is coming to a close, or perhaps your contractual additional sick payments will soon be reduced, you can take paid holidays instead. When taking paid holidays, you are entitled to the same rate of payment as you would receive during a normal working week.

As a consequence, using any remaining holiday entitlement could help to maintain a higher level of income. Certainly worth considering!

When you run out of sick pay

SSP is paid for a maximum of 28 weeks, although additional contractual sick payments will vary. It may be that your employer will pay you full remuneration for six months, half pay for a further six months and no payments after that. While it is important to note that you shouldn’t be selected for redundancy simply because of your illness, long-term sickness issues can be complex, so it is important to get advice if your employment is at risk.

If you believe that your illness is a long-term condition then you should also look to apply for what is known as the Employment and Support Allowance (ESA). You would obviously need to check your eligibility but if you are eligible, you can begin the application process up to three months before your sick pay is due to end.

Errors, misunderstandings and disagreements

While the situation regarding SSP and additional contractual sick pay is fairly straightforward, this does not mean there are not errors, misunderstandings and disagreements. If you believe that your employer has miscalculated your sick pay entitlement, it is important that you approach them as soon as possible.

• The first course of action is an informal approach highlighting what you believe to be an error or misunderstanding
• If your employer’s response is inadequate/incorrect then you may need to make a formal complaint
• In the event that your complaint fails to secure your entitlement, you may need to contact HMRC’s Statutory Payments Disputes Team
• If the dispute involves wider employment rights, such as dismissal, discrimination or breach of contract, you may need to contact Acas before making an employment tribunal claim

Where there are grey areas in relation to sick pay entitlement, you may need to integrate a degree of negotiation into your thoughts. In the vast majority of cases, sitting down and discussing issues will often lead to an acceptable compromise for all parties. Where it is clear that rules and regulations have been flouted, contractual payments ignored, this can lead to a stretching of the employee/employer working relationship.