In light of COVID-19, the government has changed the Statutory Sick Pay (SSP) regime and the ability for business to reclaim back SSP paid to employees. This article provides an overview of the SSP regime and explains the changes made.
Who qualifies for SSP?
Those classed as employees, or agency workers, who earn at least £118 per week.
Workers or the self-employed are not entitled to SSP, but they may be able to apply for Universal Credit or Employment and Support Allowance (see below).
What are Employees Entitled to?
Employees are entitled to £94.25 per week (£95.85 from 6 April 2020) for up to 28 weeks.
Businesses should bear in mind that employees may be entitled to enhanced sick pay as well as SSP, if their contracts of employment provides for this.
How does COVID-19 Impact on SSP?
As a result of COVID-19, the provisions in relation to SSP have been changed in three areas:
1. Increased entitlement to SSP:
If an employee is off sick due to COVID-19, they will be entitled to SSP.
In addition, individuals who are not themselves ill, but who are required to self-isolate in accordance with Public Health England guidance will be entitled to SSP (if they cannot work from home).
2. Removal of waiting days:
Generally, SSP is payable on the fourth day of sickness absence (after three waiting days). However, if an employee is absent because of COVID-19 they are able to claim SSP from the first day of their absence.
3. Proof of sickness:
By law, medical evidence is not required for the first 7 days of sickness. The standard position is that a fit note is required thereafter. However, if absence is as a result of COVID-19, a fit note is no longer required. Employers may use their discretion and either simply keep a note of the reason for absence or ask an employee to obtain a note from the NHW website.
What Support is there for businesses who are paying SSP?
The Coronavirus Statutory Sick Pay Rebate Scheme will allow small-and-medium sized enterprises (“SME’s”) and employers to reclaim SSP paid for sickness absence due to COVID-19.
The eligibility criteria for the rebate scheme will be as follows:
• The refund will cover up to 2 weeks’ SSP per employee who has been off work because of COVID-19;
• Employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of employees as of 28 February 2020.
How do you access the rebate scheme?
The online portal for the Rebate Scheme is not available yet, but the UK government will be working with employers over the coming months to set up the payment mechanism as soon as possible. HMRC will announce when the service becomes available.
What if an individual is not eligible for SSP?
If an individual is not eligible for SSP, they can now make a claim for Universal Credit or ‘new style’ Employment and Support Allowance.
This will include individuals who:
• are self-employed; or
• are earning below the lower earnings limit of £118 per week,
• and who have coronavirus or are advised to stay at home.
What changes have been made to universal credit?
From 6 April 2020, the government increased the standard allowance in Universal Credit and the basic element in Working Tax Credit for one year.
Both will increase by £20 per week on top of planned annual updating.
If individuals are self-employed and claiming Universal Credit, and are required to stay at home, or are ill as a result of coronavirus, the Minimum Income Floor (an assumed level of income) will not be applied for a period of time whilst the individual is affected.
What is the 'New style' employment and support allowance?
The ‘New Style’ Employment and Support Allowance is a fortnightly payment that can be claimed on its own or at the same time as Universal Credit. It is a contributory benefit.
In order to be eligible, an employee usually needs to have been working within the last 2 to 3 years, and have made (or been credited with) Class 1 or Class 2 National Insurance contributions. This can be through employment or self-employment.
Have changes been made to local housing allowance rates?
From 6 April 2020, Local Housing Allowance rates were increased to the 30th percentile of market rents. This will apply to all private renters who are new or existing Universal Credit housing element claimants and to existing Housing Benefit claimants.