A really significant change to Statutory Sick Pay (SSP) from this month seems to have largely slipped under the radar of both accounting professionals and employers likewise. And it’s going to potentially have a massive impact on small employers, so why was this not properly communicated by HMRC in the way that the Employment Allowance has been? A classic case of burying bad news perhaps??
Prior to April 2014, an employer could reclaim from HMRC any SSP paid to employees if the total SSP paid in the month amounted to more than 13% of the employer’s NIC liability for the month. In other words, small employers, whilst having to pay SSP to the employee, could at least reclaim this from HMRC. The 13% threshold was know as the Percentage Threshold Scheme (PTS).
From April, the PTS is being abolished. To be clear, all employers are bound to pay SSP if employees qualify, but there will no longer be the option to claim SSP back. This is likely to hit the smallest businesses hard, particularly if a key employee is off sick for a prolonged period. The business will have no option other than to fund SSP from their own purse.
In announcing the changes, the government have said that they would re-invest the money saved in a new Health and Work Service (HWS). When it is set up later in the year, it will effectively be a helpline offering advice to employers facing staff sickness issues. Any employee who is off sick for 4 weeks or more will be referred to the HWS who will provide a return to work plan! Excuse me for being rather scathing about this, but I’m pretty sure that most employers would much rather reclaim SSP than their money being invested in effectively another quango.
As SSP will still have to be administered, here is a quick recap of the key points:
The current rate of SSP is £87.55 per week, payable for up to 28 weeks
You can offer more if you have a company sick pay scheme, but you can not offer less
For employees to be eligible for SSP they must have:
- An employment contract
- Have done some work under that contract
- Have been sick for 4 or more days in a row (including non-working days). This is known as a Period of incapacity for Work (PIW)
- Earn at least £111 week
- The employee must tell you they are sick within 7 days
- After 7 days absence, you can ask the employee for a fit note (used to be called sick note) from their doctor
Where an employee has a pattern of significant absences there are courses of action that an employer can take, including stopping paying SSP or seeking additional medical advice, but it is best to take advice from a professional, such as an HR professional, to ensure that you remain compliant at all times.
SSP is a tricky area and if you do face the prospect of having to administer it, there is more guidance available at https://www.gov.uk/employers-sick-pay
Back to the core point though. This move will be potentially disastrous for a few unlucky employers whose core employees are off sick for long periods. And the fact that HMRC have not communicated this change at all is scandalous.