How to Claim Statutory Sick Pay

How to claim company Statutory Sick Pay?

For an employee to claim SSP, they have to fill Employee Statement of Sickness Form (SC2) and show medical causes due to which they are unable to attend work. SSP represents the minimum amount a qualifying employee may be paid. If a company scheme would normally pay less than this amount, the employer must top it up to the minimum level. If the employer operates an occupational sick pay scheme that pays as much or more than the SSP rate, and which continues for at least 28 weeks of sickness, then the employer does not need to operate all aspects of the SSP scheme and the recordkeeping requirements are reduced.

Incapacity to Work

Incapacity for work for SSP purposes relates to a day or days on which the employee ‘is, or is deemed in accordance with regulations to be, incapable by reason for some specific disease or bodily or mental disablement of doing work which he can reasonably be expected to do under the contract. Apart from the ordinary sickness and injury, it includes:

• Absence from work for precautionary reasons on the recommendation of a doctor. For example, a pregnant woman would be advised against working in a place where there is an outbreak of German measles because this disease could harm the unborn child.
• Convalescence on the advice of a doctor
• Absence from work by a carrier of an infectious disease or an employee who has been in contract with such a disease, and is excluded from work, pursuant to any public health enactment.

It is up to the employer to decide whether an employee is incapable of work and is entitled to ask for evidence. For absence of four to seven days, the employer can ask the employee for self-certification, either verbally, in writing, or by using form SC2 or an equivalent. For absence lasting more than seven days, the employer can ask for a doctor’s statement. The format of the medical statement was previously known as the ‘sick note’ to a ‘fit note’. This new statement may assert that the patient is ‘not fit for work’ or ;may be fit for work taking account of the following advice’. In the latter situation, the statement is likely to contain further advice as to what steps should be taken to enable the employee to return to work, such as reduced hours or workplace adjustments.

However, the employer does not have to follow the advice given in the fit note and may agree with the employee that he or she should remain off work, and that SSP will continue to be paid. If the recommended changes are not made, then the medical statement provides evidence that the employee is not fit for work. If the employer agrees on a phased return to work, the employee will still be entitled to SSP on the days he or she does not work, assuming the qualifying conditions continue to be satisfied.

While it is up to the employer to decide whether or not to accept the medical evidence provided, the HMRC guidance advises that a doctor’s statement ‘should usually be accepted as conclusive unless there is more compelling evidence to the contrary’. Certificates given by people who are not registered medical practitioners, such as osteopaths, herbalist, and acupuncturist, may also be acceptable, although the employer may request a doctor’s statement as well.

How to qualify for SSP

Statutory sick pay is payable to employees whose gross weekly earnings over the previous eight weeks are at or above the lower earnings limit for the payment of national insurance contributions (currently at £113 a week). If an employee is in a salary sacrifice scheme, then the average weekly earnings are calculated according to the amount of earnings actually paid out (i.e. minus the salary sacrifice).

An employee is a person who is gainfully employed in Great Britain either under a contract of service or in an office (including elective office) with emoluments chargeable to Schedule E income tax. This definition is subject to any regulations including or excluding certain categories or worker. The SSP Regulations provide that, subject to some exceptions, and ‘employed earner’ for social security purposes is to be treated as an employee. Conversely, someone who is not an employed earner is not to be treated as an employee. Apprentices who are employed earners are to be treated as employees

Agency workers are entitled to SSP as long as they satisfy the other conditions of eligibility. Whoever is responsible for deducting PAYE tax and Class 1 National Insurance Contributions is liable to pay SSP in these circumstances.

The unemployed and self-employed do not qualify for SSP. Employees are excluded from claiming SSP in a number of circumstances. The most important of these are employees who, on the first day of the PIW:

• Have average weekly earnings below the lower earnings limit for national insurance contributions (Currently £113 a week).
• Have been in receipt of Incapacity Benefit / Employment and Support Allowance and are sick within the first 104 weeks of starting work. Employees in this situation should have a ‘linking letter’ from Jobcentre plus. The employee is entitled to return to benefits, and the employer has no liability to pay SSP.
• Have not yet done any work for the employer
• Are absent from work because of a trade dispute or are legal custody
• Are members of the armed forces
• Are mariners or a foreign-going ship
• Are outside the UK and the employer is not liable to pay employers Class 1 National Insurance Contributions
• Have already received 28 weeks of SSP from the employer, and the new PIW is linked with the earlier one. Within 56 consecutive days.

Note: Pregnant employees or those who have just had a baby are not entitled to claim SSP under their Maternity Pay period.

The exclusion of employees who had already received 28 weeks of SSP from a previous employer within the previous eight weeks was removed by the Statutory Sick Pay Regulations. Similarly, the exclusion of employees’ ages under 16 or over 65 was removed by the Employment Equality Regulations.

Note: Employees who are not eligible for SSP may be able to claim Employment and Support Allowance

Where the employer determines that the employee is not entitled to SSP, it must provide the employee with a statement (usually a Form SSP1) to explain the reason. The Form SSP1 is available from the Department of work and Pensions. It can then be used by the employee to support a claim for Employment and Support Allowance.

Important: Any dispute over entitlement to SSP is adjudicated by HMRC.

How Long is SSP Paid

The employer stops paying SSP when the employee:

• Is no longer sick
• Has received SSP for 28 weeks in the PIW, including any linked periods.
• Stops working for the employer, unless the employer brings the contract to an end solely or mainly to avoid paying SSP, in which case it remains liable to pay SSP until the employee’s period of entitlement comes to an end or the contract would otherwise have ended
• Begins her Maternity Pay period
• Has had a series of linked PIWs with the employer that has lasted for more than three years, even if the employer has not paid weeks’ worth of SSP.

Note: The statutory minimum notice periods apply to SSP.

Where the employer determined that the employee’s entitlement to SSP has ceased, it must provide the employee with a statement explaining the reason. The Form SSP1 is available from the Department of Work and Pensions. It can be used by the employee when claiming Employment and Support Allowance.

Recovery

There is no general provision enabling employer to recover sums paid by way of SSP, and there is no longer a ‘small employers’ exception. However, an employer can recover the amount by which it payments of SSP in any income tax month exceeds 13% of the amount of the employer’s liability for national insurance contributions for that month.

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.