Coronavirus: Statutory Sick Pay support

This factsheet has been updated and enhanced to reflect new guidance dated 7 April 2020, which was not available from the Chancellor’s initial Budget announcements on 11 March 2020. In particular, we now have some more detail on the maximum amounts employers can recover for those employees who become eligible for Sick Pay due to Coronavirus. There is also more detail on the required recordkeeping for employers.

Obviously, with the current lockdown situation and many businesses exercising remote working policies, the potential risk of employees now contracting the virus may have reduced significantly, but the special Statutory Sick Pay (SSP) rules announced in the Budget (now called the Coronavirus Statutory Sick Pay Rebate Scheme or SSPRS), is still likely to be of relevance to some businesses.

The regulations laid down on 12 March 2020 extend the statutory sick pay (SSP) rules to provide that individuals who are isolating themselves from others in accordance with advice on coronavirus disease are deemed to be incapable of work.

The measures bring forward legislation to allow “small and medium-sized” businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The criteria for the scheme will be as follows:

1. Refund period

  • The refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19.

2. Eligibility, SSP rates and payments

  • Employers with fewer than 250 employees will be eligible - the size of an employer will be determined by the number of people they employed as of 28 February 2020.
  • Eligible employees include full-time employees, part-time employees, employees on agency contracts, employees on flexible or zero-hours contracts.
  • Entitlement to SSP is based on average earnings in the eight weeks prior to the absence reaching the lower earnings limit for the year in question. Thus, for a zero-hours contract employee, it does not matter whether or not the employee was assigned any work in the week in which they are now sick.
  • Rates of SSP increased on 6 April 2020. The same weekly SSP rate applies to all employees (ie, whether or not the SSP is COVID-19 related).
  • The amount that an employer must actually pay an employee for each day that they are off work due to illness (the daily rate) depends on the number of ‘qualifying days’ that they work each week. Employers can use the government’s SSP calculator to work out an employee’s sick pay if their payroll software does not do this (the government’s SSP calculator has been updated for the 2020/21 rates), or use the table in HMRC’s guidance here: to work it out manually.
  • The new coronavirus statutory sick pay rebate scheme (SSPRS) will repay statutory sick pay (SSP) to employers that they pay to employees for periods of sickness starting on or after 13 March 2020. The maximum recoverable will be the SSP amounts prescribed by government (ie, at the rates of £94.25pw for 2019/20 and £95.85pw for 2020/21).

3. Recordkeeping

  • Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note.
  • Employers must keep, for at least three years following a claim, records of all the SSP claimed from HMRC. These records must include:

- the reason why each employee could not work;

- details of each period when each employee could not work, including start and end dates;

- details of the SSP qualifying days when each employee could not work; and,

- NI numbers of all employees to whom SSP has been paid.

4. SSP due to Coronavirus

  • For Coronavirus (COVID-19) cases, there are two categories of employees and they have different rights to SSP:
  1. Employees who because of COVID-19 were absent from work due to sickness or self-isolated before 13 March 2020. As for normal SSP, ‘waiting days’ apply and employers should pay SSP from the fourth ‘qualifying day’.
  2. Employees who on or after 13 March 2020 are because of COVID-19 absent from work due to sickness or need to self-isolate.
  • Self-isolating includes those caring for people self-isolating in the same household and therefore have been advised to do a household quarantine. It also includes sick individuals who are ‘shielding’, which is a measure to protect people who are clinically extremely vulnerable.
  • Employers should start paying SSP from the first ‘qualifying day’ that an employee is off work, as long as they are off sick for at least four days in a row.
  • Employees who are on sick leave or self-isolating because of COVID-19 should speak to their employer about whether they are eligible for SSP. They should be paid SSP while on sick leave or self-isolating. When they are once again available for work, they can be furloughed under the COVID-19 job retention scheme. Employees who choose to self-isolate and are not sick are making themselves unavailable for work, so are ineligible for either SSP or furloughing.

(Source: Updated Government and ICAEW guidance dated 7 April 2020)

For further information or advice on any of the issues raised, or for help with services like bookkeeping, cash flow management or payroll during the Coronavirus pandemic, please call us on 01225 325580 or email or contact your usual client director.

Please note that this is only a summary of the main issues and should not be construed as advice. Every effort has been made to ensure factual accuracy at the time of publication (9 April 2020), however, the government response to the Coronavirus situation is changing 24-7, so it should not be relied upon completely.