LITRG Press release: Tax experts try to clear up Statutory Sick Pay misinformation

2020-03-29

UK Low Incomes Tax Reform Group is highlighting that there is a lot of well-meaning but incorrect information about Statutory Sick Pay on the internet and it is important that people use trusted sources to confirm their position.

Emergency legislation (backdated to 13 March 2020) has been passed which allows Statutory Sick Pay (SSP) to be paid from the first day of sickness absence, rather than the fourth day, for people who have COVID-19 or have to self-isolate, in line with official guidance.

SSP (currently £94.25 per week, going up to £95.85 from 6 April) is available for people who are an 'employed earner' (basically those who are working for an employer who has a liability to pay National Insurance for them) and who earn an average of at least £118 per week. The earnings taken into account are broadly the average weekly earnings for the prior eight weeks. People who earn less than £118 (£120 from 6 April) per week or who are self-employed (including those treated as self-employed for tax purposes by their engager) are not entitled to SSP.

Victoria Todd, Head of LITRG, said:

"In response to increasing numbers of incorrect articles and commentary on SSP provision in relation to the coronavirus crisis, the Low Incomes Tax Reform Group would like to clarify that:

. SSP, as things stand, is payable to people who cannot work
because they have to self-isolate in accordance with
government guidance. The government guidance (as at 24
March 2020) on isolation is limited to those who have
symptoms or those who live with someone who has symptoms.
. Currently the legislation does not appear to extend to
people who cannot work because they fall within the 'social
distancing' or ‘shielding’ measures etc. But we are
discussing this with HMRC.
. The £118 per week limit, is per job. You cannot amalgamate
earnings over two or more jobs to see if you meet the limit
(unless those jobs are with the same employer). On the
other hand, if you have two or more jobs and earn at least
£118 in both – you can get SSP from both employers.
. SSP is not a ‘worker’ employment law right but rather one
that is tied to whether secondary Class 1 National
Insurance is payable. This means that agency workers,
temporary workers and casual workers who pay their tax and
NIC under PAYE may qualify, whereas those in self-
employment (even if it is 'dependent' self-employment) will
not qualify, as they do not pay Class 1 NIC.
. To qualify for SSP you must have done some work under your
contract (even if this is just a few hours' worth). This
means that if you are in a new job – you may qualify for
SSP even if you have not been paid yet.
. Zero hours contract workers who pay their tax and NIC under
PAYE may qualify - provided they have done some work under
their contract. Zero hours contract workers who have not
yet done any work under their contract, will not be
entitled to SSP.
. Part-time workers who earn at least £118 per week, qualify
for SSP at the normal full weekly rate – they do not
receive a pro rata amount. So, someone who is self
isolating for two weeks and who normally works five days a
week should get £188.50 in total. Someone who is self
isolating for two weeks and who normally works three days a
week should also get £188.50 in total.
. SSP is payable until your period of illness/self-isolation
ends or until your contract ends (if earlier). Agency
workers should be aware that if they have less than three
months continuous service, then SSP is only payable to the
end of any agreed assignments."

LITRG is pointing out that technical guidance to help employers understand the rules in complex or unusual situations, such as where they have a new employee without
eight weeks of service, or where they cease to trade or become insolvent, is available on Gov.UK and in HMRC's statutory payments manual.

source: U.K. Low Incomes Tax Reform Group