Wurkplace are here to give you the quick update on all Statutory Sick Pay changes. At the moment, the SSP entitlement is £96.35 a week for up to 28 weeks. As of April 2022, SSP entitlement will increase to £99.35 a week for up to 28 weeks.
What’s the criteria?
The average earnings an employee has to earn to be entitled to these payments is set to increase from £120 to £123 per week; this will represent the first increase to this rate for two years. You can offer more if you have a company sick pay scheme (you cannot offer less) which must be included in an employment contract.
SSP is paid for all ‘qualifying days’ which are the days the employee would normally work. The employee must be sick for at least 4 days in a row (including non-working days). The first 3 days are known as waiting days.
SSP is liable to tax and NI deductions, therefore as the payment amount is increasing, so will the amount deducted from an employee’s allowance, especially even more due to the 1.25% increase on NI contributions. Although, you may find an employee won’t be liable to these deductions as it could be covered by the annual tax-free allowance.
Employers will also be hit by having to pay out more NI contributions than usual on SSP due to the 1.25% increase.
Prior to the news of the increase in April 2022, the CIPD (the professional body for HR and people development) warned ‘The Statutory Sick Pay (SSP) system is broken and needs urgent reform’. Although, this view may still stand, as they could argue the increase isn’t enough.
According to CIPD research, almost two thirds of employers say the UK’s Statutory Sick Pay rate is too low and should be increased.
The current rate is very low compared with most other European countries. Even the majority of SMEs, which would typically find it harder than larger employers to cover increased SSP costs, are supportive of an increase. The news of the increase in April 2022 will therefore bring great satisfaction to many.
The current level of SSP is so low that many individuals continue to work when they are ill as they cannot justify living off the income the current SSP rate supplies. The CIPD says steps must be taken to make additional Statutory Sick Pay changes to ensure that SSP provides a better financial safety net.
In the UK, there is a 32.5 million-strong workforce. Out of this, 5.6 million people (17.2%) do not currently qualify for SSP. This includes the self-employed and those who are unable to access SSP because they don’t meet the lower earnings limit (currently £120 per week).
The CIPD is calling for the Government to raise the level of SSP to be at least the equivalent to someone earning the National Minimum Wage/National Living Wage. For example, for someone aged 23 or over working seven hours per day, their pro-rata daily SSP rate would be £62.37.
The CIPD also recommends broadening the eligibility criteria for SSP by removing the lower earnings limit, as well amending the rules to allow for phased returns to work, abolishing the three qualifying days for payment of SSP, and looking at chances to improve income protection for the self-employed.
Along with these calls to Government, the CIPD is encouraging employers to ensure they have a scheme to improve financial wellbeing that covers elements such as paying a living wage, making sure their workforce is aware of all the benefits currently offered and information about where to get free, independent money and debt advice.
In addition, employers should consider the benefits of introducing an occupational sick pay scheme to enhance pay above the statutory minimum for employees who can’t work when sick.
COVID and SSP
The Statutory Sick Pay Rebate Scheme closed on the 17th March 2022. Companies have until the 24th March 2022 to submit any new claims for absence periods due to Coronavirus up to the 17th March 2022, or to amend claims they have already submitted.
From the 25th March 2022, normal SSP rules will come into effect meaning that an employee has to be off for 4 days to claim SSP (as explained above).
A valued member of the Wurkplace team providing administrative and coordinating skills for the HR department and also overseeing the accounts department of the business whilst carrying out key bookkeeping tasks and conducting payroll.
Georgia holds a level 3 in Business Administration and AAT level 2 whilst continuing to work towards gaining a diploma in AAT.