Government says there are no imminent reforms to Statutory Sick Pay

The Coronavirus outbreak and subsequent lockdowns threw the country’s finances into turmoil, with many emergency measures introduced to mitigate its effects.

It also put the spotlight on Statutory Sick Pay (SSP) and how it could be reformed and whether it could be increased from the current level of £96.35 per week.

After launching a consultation, the Government has now responded and said there will be no imminent changes to the SSP system.

The initial consultation, launched in 2019, included a raft of questions relating to SSP, with the aim of making the system simpler and more flexible.

These included:

• Amending the rules of SSP to allow for phased returns to work following sickness absence;
• Widening eligibility for SSP to extend protection to those on the lowest incomes; and
• Strengthening compliance and enforcement of SSP to ensure employees are paid what they are due.

The outbreak of Coronavirus shone a light on SSP, but the Government maintains that this was not the correct time to make amendments to the rate of SSP or the eligibility criteria.

Instead, changes to SSP for those who were self-isolating or affected by coronavirus were made, and the Coronavirus Job Retention Scheme (CJRS) was introduced.

At present, SSP is not compatible with phased returns, as payment of SSP stops completely as soon as an employee returns to work, even if this is on reduced hours. The furlough scheme currently allows for this.

This can often act as a barrier to employers offering phased returns to employees, and to employees accepting those arrangements. Consultation responses indicated that there needed to be clearer guidance on phased returns.

To qualify for SSP, an employee has to earn at least the Lower Earnings Limit (LEL), which, currently at £120 per week. This also applies to individuals with multiple jobs, in each of which they are paid below the LEL.

This earnings threshold was not removed during the pandemic as the Government felt that this would not have been an appropriate time to increase employers’ costs.

The Coronavirus SSP Rebate Scheme was implemented to support small and medium-sized businesses with the cost of Coronavirus-related absences. The Government wanted to explore views on a permanent rebate system, but responses were mixed.

The scheme allows small and medium-sized employers, with fewer than 250 members of staff, to apply to recover the costs of paying coronavirus-related Statutory Sick Pay for two weeks – worth nearly £200 per employee.

Those who were in support of the rebate were interested in the ease of access over the associated conditions.

Others, who were concerned, felt that this sort of conditionality could mean that employers brought employees back to work before they were ready.

If you have questions about SSP and how it interacts with payroll compliance, please speak to a member of our payroll team today.