COMPLIANCE
Statutory sick pay and Covid-19
The CIPP policy and research team discuss closure of the statutory sick pay (SSP) rebate scheme
I n March 2020, the government announced that individuals who had symptoms of Covid-19 should isolate for fourteen days. The practical implication for many resulted in time off sick from work. For almost two years, self-isolation requirements have continued. The situations in which to self-isolate have varied across this period, however, the measures that were put in place to support employees and small businesses have remained in place, until now. SSP rebate scheme The requirement to stay at home resulted in many employees taking time off sick. Providing employees earn above the lower earnings limit, SSP is payable. Isolation, therefore, created a significant cost implication for businesses – alongside the challenges of managing absence cover. In recognition of this burden, the government introduced the SSP rebate scheme, to support small and medium- sized businesses. The SSP rebate scheme allowed employers who had less than 250 employees on 28 February 2020 to reclaim SSP for a maximum of two weeks. Employers’ claims were capped at the number of employees registered on their pay as you earn scheme at this time. For example, if an employer had two hundred employees on 28 February, and later employed an additional twenty people, the additional hires would not be eligible for the scheme. The rebate scheme was limited to employees who were sick due to coronavirus, which could also include self- isolation due to being extremely clinically vulnerable or isolating because they lived with someone who had tested positive for Covid-19. The scheme did not extend to employees who had to quarantine after returning to the UK from abroad. Employers must have paid the employee SSP prior to submitting any
claim, but once paid, employers could sign in to the online portal to submit their claims. The scheme also qualified as state aid under the European Union Commission’s Covid-19 temporary framework, which caps support. It is essential that records of all claims are kept for a period of three years after the payment is received. These records include: ● absence dates ● qualifying absence dates ● reasons for absence ● employee’s national insurance number. Payroll professionals have had to remain vigilant in learning and applying new legislation throughout the pandemic In September 2021, after nineteen months in operation, the government announced that the scheme would be closed on 30 September 2021. However, the online portal is, at the time of writing, still available to employers who can make a claim relating to absence before the closing date up until 31 December 2021. The closing date for support aligns to the closing date for the coronavirus job retention scheme and marks an end to two key measures that were put in place to support businesses the height of the pandemic. SSPwaiting days Alongside government support measures, UK businesses were required to enhance the
level of SSP provided to employees. The long established SSP waiting days, which prevent SSP from being payable until the fourth qualifying day, were removed for absences related to Covid. Instead, employers were required to pay SSP from the first day of absence, providing a period of incapacity for work was formed. This measure was introduced to support employees, who had little choice in taking time off, to have a greater level of pay than would otherwise have been available. For example, an employee who was absent during the 2021/22 tax year would receive an additional £57.81 for two weeks’ sickness (where they had five qualifying days per week). Unlike the government-funded support schemes, this measure has yet to be removed. Employers must continue to pay waiting days for Covid-related absences. For many payroll professionals, this has also created a manual burden where their payroll system has not been updated to accommodate this change automatically. There is no clear indication on when this requirement will end, however, there was a possible hint in the government’s autumn and winter plan. In spring, a review will take place to decide whether any measures in the Coronavirus Act need to remain in place. If there is no extension applied, it is likely the requirement will end at midnight on 24 March 2022. The impact on payroll Payroll professionals have had to remain vigilant in learning and applying new legislation throughout the pandemic. Looking to the new year, it is inevitable that change will continue to impact the profession. As the government support measures draw to a close, payroll professionals have an ongoing requirement to look at the reason for absence and apply the relevant rules relating to waiting days. In addition, the ongoing audit and record-keeping requirements will impact payroll teams for years to come. n
| Professional in Payroll, Pensions and Reward | December 2021 – January 2022 | Issue 76 20
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