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Flexible sick pay could offset the cost of sickness absence, new study finds

Employees’ mental health issues are notoriously difficult to deal with even for the most understanding and supportive employers. Unlike a cold or a broken arm, mental health problems do not usually have a timescale for recovery. Employees who attend work while unwell do not do favours for either the employer or themselves. 

At the same time, people experiencing mental health issues often have no choice but to work despite not feeling well, due to the financial costs of taking time off. The Money and Mental Health Policy Institute states in its report titled ‘Too ill to work, too broke not to’ that workplace sickness absence is currently viewed too rigidly and proposes a more flexible approach to sick leave.

According to the report, mental health issues are the fourth most common reason for taking time off work, with an estimated 15.8 million working days lost in 2016 due to mental health sickness absence. This has cost employers £8 billion.

The institute makes three recommendations:

  1. To increase the flexibility of Statutory Sick Pay so people would be able to reduce their hours to access additional support and allow people to combine their wages with their benefit.
  2. Increasing the level of Employment Support Allowance (or the ‘limited capacity for work’ element of Universal Credit) paid during the 13-week ‘assessment’ period to the same amount as Statutory Sick Pay; and,
  3. Increasing access to income protection products, particularly for people who have pre-existing conditions.

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