Head of Legislation and Compliance Cintra HR & Payroll Services
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Coronavirus: Statutory Sick Pay repayments and the law

Statutory Sick Pay (SSP) remains a real issue for employers who have employees who are sick or in self-isolation. Ian Holloway looks at the relevant legislation and what we are still waiting for. 

22nd Apr 2020
Head of Legislation and Compliance Cintra HR & Payroll Services
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Since writing on the subject in March, the issue of SSP has largely been overshadowed by announcements about retaining employees, furloughing and then reclaiming wage costs from HMRC. However, the issue of SSP has been rumbling away in the background, perhaps hidden by furloughed employees.

The announcement

Everything started with the Prime Minister’s announcement that the Coronavirus Act 2020 would make provision to temporarily allow SSP to be paid from the first day of sickness absence, rather than the fourth day.

This only applies for people who had been told to self-isolate, and for people caring for those within the same household who display COVID-19 symptoms and have been told to self-isolate. Point 1.94 in the 2020 Budget Red Book confirms exactly this.

New regulations

Whilst the Coronavirus Act 2020 may have allowed this change to happen, secondary legislation in the form of regulations are required to make those changes effective in practice. 

Two sets of regulations (for Great Britain and Northern Ireland) opened up the SSP system to employees isolating themselves from others in accordance with advice on coronavirus disease and, therefore, deemed to be incapable of work. This advice came from Public Health England, NHS National Services Scotland, Public Health Wales, or the Regional Agency for Public Health and Social Well-being in Northern Ireland on 12 March 2020):

  1. The Statutory Sick Pay (General) (Coronavirus Amendment) Regulations 2020
  2. The Statutory Sick Pay (General) (Coronavirus Amendment) Regulations (Northern Ireland) 2020

Both of these regulations came into force on 13 March 2020.

These regulations have not fundamentally changed the workings of SSP. There will still be a requirement to form a period of incapacity for work (PIW). The only thing that the new legislation does is open up the SSP system to more people. Plus (but not yet enacted) smaller employers may be able to recover the first 14 days of SSP that is COVID-19 related from HMRC.

When does it take effect?

The two further sets of regulations amend the effective date of the guidance from the relevant health advisory bodies in each of the UK nations, from 12 March 2020 to 16 March 2020. The reason for the change is that the guidance on 16 March 2020 changed the self-isolation advice from 7 days to 14 days in some cases. They only amend the legislation for employees isolating themselves:

  1. The Statutory Sick Pay (General) (Coronavirus Amendment) (No 2) Regulations 2020
  2. The Statutory Sick Pay (General) (Coronavirus Amendment) (No. 2) Regulations (Northern Ireland) 2020

The Great British legislation came into force on 17 March 2020 whilst the Northern Irish legislation came into force on 19 March 2020.

Shielding

More regulations open up the SSP system to employees shielding themselves from others in accordance with ‘public heath guidance’, as amended from time to time, issued by Public Health England, Scottish Ministers, Public Health Wales National Health Service Trust or the Regional Agency for Public Health and Social Well Being in Northern Ireland:

  1. The Statutory Sick Pay (General) (Coronavirus Amendment) (No. 3) Regulations 2020
  2. The Statutory Sick Pay (General) (Coronavirus Amendment) (No. 3) Regulations (Northern Ireland) 2020

So, as a result of the three new sets of regulations, we know that SSP is payable to people that are self-isolating or shielding.

Waiting days

Aside from the SSP Regulations 1982, it is the Social Security Contributions and Benefits Act 1992 (section 155) and the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (section 151) that both say: “Statutory sick pay shall not be payable for the first three qualifying days in any period of entitlement.”

Therefore, if SSP is to be payable from the first day of COVID-19 related sickness absence (actual sickness, self-isolation or shielding) rather than from the fourth day, these two pieces of legislation need amending:

  1. The Statutory Sick Pay (Coronavirus) (Suspension of Waiting Days and General Amendment) Regulations 2020
  2. The Statutory Sick Pay (Coronavirus) (Suspension of Waiting Days and General Amendment) Regulations (Northern Ireland) 2020

The purpose of both of these regulations is to say that the three waiting days do not apply where the sickness/absence is COVID-19 related and the first day of that sickness/absence is on or after 13 March 2020. 

Also, both pieces of legislation omit the expiry date meaning that the legislation changes no longer cease to have effect eight months following 13 March 2020.

Reclaiming SSP

As at 22 April 2020 employers are able to pay SSP to a wider range of people, and the three waiting days have been suspended (for COVID-19 related sickness, self-isolation or shielding). This does not mean that any other SSP rules have been replaced or repealed.

The promise that employers will be able to reclaim the first 14 days of COVID-19 related SSP has not manifested itself into legal reality. The government guidance still says, “The online service you’ll use to reclaim SSP is not available yet. HMRC will announce when the service is available and this guidance will be updated.”

However, there is some useful information in that guidance such as:

  • Employers must have set up a PAYE scheme by 28 February 2020 and have started to use it
  • In order to make a reclaim for SSP the employer must have less than 250 employees on the payroll at 28 February 2020

I wonder if the 28 February 2020 date will change to 19 March 2020, just like it did regarding eligibility for the Coronavirus Job Retention Scheme.

Employers may also be interested in the guidance on work out your employee's Statutory Sick Pay  and the HMRC tool: calculate your employee's statutory sick pay.

I will keep you updated about SSP reclaims in another article as we do not have a satisfactory solution to the employer’s dilemma.

Replies (2)

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By dsassoon
23rd Apr 2020 09:45

Thanks for highlighting the SSP issues - as you say, it has been overshadowed recently.

However, from the guidance it seems that for those that have to isolate for longer than 14 day, eg if household member has subsequently been taken ill, it looks like employers have to fund this themselves, as per regular SSP ?

In large households, this could mean a member of staff could be away from work for many weeks, at the cost at the employer.

For SME's, this is another financial burden.

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By Carolynne
23rd Apr 2020 11:39

The information coming in has been confusing for clients to say the least.

At first we read that:
'If an employee is already receiving SSP as they are off sick or self-isolating, they would not be able to be placed on furloughed leave and should continue on SSP'.

Later we read... Employers are also entitled to furlough employees who are being shielded or off on long-term sick leave. It is up to the employers to decide whether to furlough these employees. You can claim back from both the CJRS and SSP rebate scheme for the same employee, for not for the same period of time.

With so much additional work being carried out by accountants at the moment for their clients, it is hard to keep up, and also in some instances, our own interpretation has to be made when it is not totally clear, because something comes up that HMRC has not considered yet.

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