COVID-19 – When does Statutory Sick Pay apply?

In cases where an employee is either unwell or required to self-isolate due to COVID-19, SSP should be paid from day 1 (rather than day 4) of the employees’ absence.

SSP is paid at £94.25 per week (£95.85 from 6 April 2020) and an employee can receive the payment for up to 28 weeks.

To be eligible for SSP, individuals need to be classed as an employee or worker for employment law purposes and have done work for the employer, they must earn an average of £118 a week (£120 per week from 6 April 2020) over the 8 weeks prior to the start of the absence. They must not have already received the maximum SSP entitlement (28 weeks) or be in receipt of Statutory Maternity Pay. The individual must have earnings subject to class 1 NI, must not be in legal custody nor off work as a result of a trade dispute.

Many people such as those on zero-hours contracts – who work variable hours every week – may earn less than this. 

Where a pregnant woman stays at home due to government guidance relating to coronavirus, it will not be classed as a pregnancy related illness. This means normal rules will apply in that SSP will cover this and the woman will not have to bring her maternity pay period forward.

What can be reclaimed from the government?

A business can reclaim up to two weeks’ SSP per eligible employee from the government. This includes companies who are paying company sick pay rather than SSP.

Which employers will qualify to claim SSP back from government?

Any employer in the UK who employs less than 250 employees as of 28 February 2020 will be able to make the reclaim once the mechanism becomes available.

We expect that the 250-employee cap will apply to groups of companies rather than per PAYE scheme although this has not yet been confirmed. The cap is also likely to be based on full-time equivalent employees. So, we recommend you consider the UK workforce as a whole in establishing your eligibility to reclaim.  

How will an employer claim SSP back from the government?

There is no mechanism in place yet to reclaim the SSP payment. HMRC has said that it will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible due to the fact that existing systems are not designed to facilitate employer refunds of SSP.

There may be a significant delay in SSP repayments coming through so businesses should look to maximise all other options which are available. These include:

  • Applying for a one-off cash grant of £10,000 if you are eligible for small business rate relief or rural rate relief;
  • Access to the new temporary Coronavirus Business Interruption Loan Scheme;
  • Business rates holiday if you are within the retail, leisure or hospitality sector;
  • Consider using Time to Pay (see our other linked blog here)
  • Corporate tax “cash” credits for loss surrenders available under R&D Tax Reliefs, Creative Sector Reliefs, Land Remediation Reliefs or Enhanced Capital Allowances
  • Loss reliefs under the tax rules generally

What records will an employer need to keep?

Employers need to keep records, by employee, of each day a person has been sick or required to self-isolate due to coronavirus. It is important that even if a worker is working from home, because they are required to self-isolate (due to them or a family member showing symptoms) that this is recorded as self-isolation.

These records need to date back to 13 March 2020 (The “eligible period” start date) and kept moving forward.

Please note the onus to keep records is on the employers themselves.  And they will need the records to claim back the refunds in due course.  

So, you should put in place a tracking process for staff who are off sick or are required to self-isolate.  But it may be some months before you either need it or can use it to reclaim your employer costs.  

Do employees need a sick note?

It has been confirmed that employees will not need to present a sick note.

From Friday 20 March onwards, those who have COVID-19 or are advised to self-isolate will be able to obtain an “isolation note” by visiting NHS 111 online and completing an online form, rather than visiting a doctor.

Contact us

If you have any questions on this, the availability of other reliefs or Time to Pay arrangements, please contact:

Alastair Wilson (Tax Partner) – alastair.wilson@taitwalker.co.uk
Andrew Moorby (Tax Partner) – andrew.moorby@taitwalker.co.uk
Clair Williams (Employment Tax Senior Manager) – clair.williams@taitwalker.co.uk
Claire Brown (Payroll Senior Manager) – claire.brown@taitwalker.co.uk