For all its seaside delights, Margate in Kent is one of the most deprived parts of the UK. Amid the cost of living crisis, many families are struggling to make ends meet.

Falling ill can become a headlong plunge into poverty – as Kyra Lloyd, a 25-year-old shop assistant, discovered when she began experiencing agonising pain in her ankle and she was left unable to stand.

“I started getting some very horrible, horrible pains. My foot was completely swollen, I couldn’t move.”

Doctors told Kyra the metalwork holding her bones together since a childhood fracture had snapped – and without surgery she could end up permanently in a wheelchair.

During the long wait for treatment she was signed off work. But statutory sick pay barely covered half her rent – let alone any other living expenses.

“I’m in so much debt now because of it,” she says.

“I have about £3,000 in debt from borrowing from people and getting loans because I just couldn’t afford to live. I couldn’t pay my rent. It’s just not enough.

“It’s embarrassing to ask people when you can’t even afford to eat.

“I ended up having just gravy and bread for dinner because I just couldn’t afford it – the question was do I have a roof over my head or food? No one should have to choose.

“Even things like washing your clothes… I was having to wash them in the bath at one point because I just couldn’t afford to use that much electricity. It’s so difficult. It’s not right.”

Kyra has now recovered and has a new job, but she’s constantly worried about the pain coming back.

“Every time I feel a slight twinge in my foot, I think – I can’t afford to go back on sick pay, I can’t afford another surgery. It’s a huge stress.”

Christopher Balmont, 57, has been working as a head chef in a restaurant for more than a decade. His partner is unable to work as she cares for their daughter, who has special educational needs.

Earlier this week, he was signed off work with depression and anxiety. Statutory sick pay will only cover a quarter of his normal income – and the stress of how to pay the bills is making his condition worse.

“I don’t sleep, I feel anxious most of the time, and this makes me even more anxious,” he says.

“I’m worried about the whole situation and the amount you get. I would have thought it would be more. I haven’t had to claim it before, so it’s just a bit of a shock. And I had no choice. If I had a choice I’d be at work.

“It’s not just me that’s suffering from my illness, it’s my family as well.”

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Call for more help to get millions of long-term sick back into employment

While around half of workers are offered more generous levels of sick pay by their employers, a third are only entitled to the legal minimum.

What is statutory sick pay and how does it work?

Statutory sick pay is currently £109.40 a week, which works out at around a third of the minimum wage.

It is only paid from the fourth consecutive day of illness – during COVID this was temporarily changed so workers were entitled to support from day one, but that stopped last year.

Your employer does not have to pay if your average weekly earnings are less than £123 a week.

This means two million of the country’s lowest paid workers receive no sick pay at all – a situation which particularly affects those in jobs like cleaning, caring and security where zero-hours contracts are common and staff often work shifts for multiple employers. Self-employed people are not covered either.

In 2019, the government pledged to improve and expand statutory sick pay to cover all low-paid workers for the first time.

The idea was strongly supported in the resulting public consultation, with 75% of respondents in favour, including large and small employers. But during the pandemic that promise was abandoned.

Research on minimum income standards

Matt Padley, from Loughborough University’s centre for research in social policy, has calculated the impact of falling ill and relying on statutory sick pay in the light of his research on minimum income standards.

He and his team produce the annual minimum income standard calculation, which determines the weekly budget needed by households to maintain a socially acceptable standard of living in the UK.

For a single person living outside London that figure in 2022 was £489.20 a week.

Under statutory sick pay, a worker’s earnings are less than 25% of what they would need just to meet that minimum standard.

In the first week of illness, when payment only begins from the fourth day, that figure is 10%.

Within a month, a single adult previously on average earnings of £630 a week would face a shortfall of £1,230 – in three months, it’s £3,862.

“Without any other support from the state, all workers receiving statutory sick pay or no sick pay would fall well short of what they need for a minimum socially acceptable standard of living,” Mr Padley says.

That equates to more than 12 million people.

People are being forced onto benefits system

The campaign group Safe Sick Pay, a coalition of charities and trade unions, is calling for statutory sick pay to be increased in line with the minimum wage, for all employees to be covered, and for payments to begin on the first day of illness.

“Currently if these workers fall sick, they either have to go into work sick – making their condition worse and potentially infecting other people – or they stay at home and do the right thing, but then they’re left unable to pay the bills,” says campaign director Amanda Walters.

She argues low rates of statutory sick pay are forcing people onto the benefits system – as levels of support are significantly higher.

“If you fall sick and you only get the legal minimum sick pay then very quickly you’re going to fall out of the workforce, going onto benefits and to universal credit. And the longer you’re on universal credit, the harder it is to get back into the workforce.

“That is why we want to see a link between those that are sick and their employer not pushing them onto universal credit.

“A lot of these people want to remain in work. They don’t want to go onto universal credit. And at the moment, the current system is costing the taxpayer £55bn.”

‘Sick pay reform is overdue’

Encouraging people to return to employment after a period of long-term sickness was a key priority of the chancellor’s “Back to Work” budget in March.

But statutory sick pay was not mentioned, and some senior Tories, including former cabinet minister Sir Robert Buckland, argue sick pay reform has to be part of the strategy.

“Now’s the time for action,” he says.

“We’re talking about hundreds of thousands of people who, through no fault of their own, might get ill and who end up staying off work for longer because of the disincentives that are caused at the moment by the lack of reach of statutory sick pay.

“We need a range of measures to combat economic inactivity and lack of productivity. And it seems to me that a reform to stop sick pay is overdue.

‘A win-win for employers’

“It’s not just a compassionate move, it’s a common-sense move. It’s a pro-business move. It’s a productivity enhancing move.

“It’s a win-win for employers, because at the moment there’s a disincentive to even announce any illness at all, and that can lead to further problems down the line. And very often longer-term absence is disastrous for small employers who really get hit hard by that.”

A Department for Work and Pensions spokesperson said the government has a “strong track record” of getting people off benefits and back into work, and that the number of people who are economically inactive is going down.

“We are implementing a range of initiatives supporting disabled people and people with health conditions not just to start, but to stay and succeed in work,” they added.