TQOTW: Possible SSP Reformation

I understand the Government has issued a consultation on reforming the SSP rules. How will this affect my clients as employers?

The consultation on ways whereby both the Government and employers can reduce ill health-related job losses. The Government proposals are also intended to provide early access to occupational and financial advice to employers to avoid their employees with long term health conditions falling out of work as well as supporting employers in getting their employees back into work following ill health.

One of the proposed changes involves looking at ways of reforming the current SSP rules, one being a reduction in the qualifying threshold, currently, £118 per week which will allow payment of SSP to employees whose earnings are below this. The second being a rebate to employers who support employees in returning to work following ill health. Ultimately, this proposed reformation of the current SSP rules will make for better control and will allow up to 2 million low paid workers currently not entitled, access to SSP.

The current rules 

Currently, the weekly rate for Statutory Sick Pay (SSP) is £94.25 for up to 28 weeks. It is paid for the days an employee normally works – called ‘qualifying days’ – SSP Regs 1982 (reg 5)

  • in the same way as wages, for example on the normal payday, deducting tax and National insurance SSP Regs 1982 (reg 9)

SSP is paid when the employee is sick for at least 4 days in a row. The first 3 qualifying days are called ‘waiting days’. You start paying SSP from the fourth ‘qualifying day’ (day an employee is normally required to work)

According to HMRC Statutory Sick Pay (SSP) employer guide, to qualify for Statutory Sick Pay (SSP) employees must: 

  • have an employment contract
  • have done some work under their contract
  • have been sick for 4 or more days in a row (including non-working days) – known as a ‘period of incapacity for work’
  • earn an average of at least £118 per week
  • give you the correct notice
  • give you proof of their illness, only after 7 days off

Phased returns

 The government has said that each year, more than 100,000 people leave their job after a sickness absence lasting at least four weeks One area of the consultation will allow the Government to explore allowing phased returns to work, during which people would continue to receive statutory sick pay.  Currently, SSP is not payable on any day an employee performs any work – SSP Regs 1982 (reg 2).  The HMRC’s Statutory Sick Pay (SSP) employer’s guide states:

You cannot count a day as a sick day if an employee has worked for a minute or more before they go homesick”.

Along with the non-payment of SSP on any day worked there is a further requirement to be sick for at least 4 consecutive days including non-working days before SSP can be paid:

To qualify for Statutory Sick Pay (SSP) employees must have been sick for 4 or more days in a row (including non-working days)”

This often causes added pressure to both employer and employee where there may be a requirement to work on certain set days in the build-up to returning to work full time.  Croner Taxwise receives many queries from clients confused as what to pay an employee in respect of SSP on a phased return. The current SSP rules can be accused of restricting and distracting both parties from dealing with the matter in hand, which is to create a satisfying and stress- free gradual return to work without the added financial worry of whether entitlement to SSP is still valid.

Reclaiming SSP

Another area of the consultation is the possibility of offering a rebate to small businesses who help employees return to work. This perhaps suggests a reversal on the abolition of the Percentage Threshold Scheme (PTS), which allowed employers to reclaim SSP in some circumstances.

In the explanatory memorandum to the Statutory Sick Pay (Maintenance of Records) (Revocation) Regulations 2014, the reason given for the abolition of the Percentage Threshold Scheme was:

“Government agreed that the PTS should be abolished because it provides a disincentive to employers by providing compensation for sickness absence rather than supporting them to actively manage sickness absence in the workplace.”

Could it be that the Government may be acknowledging at long last that small businesses struggle with the ongoing costs involved in managing and paying their workforce?

The outcome of this consultation could be seen as a major change in the rules surrounding entitlement and processing of SSP. We remain optimistic about its outcome and how this will impact businesses and payroll departments alike. We will advise clients as to any changes to the SSP regulations following the closure of the consultation on 7th October 2019.


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