The Treasury is being urged to rethink proposed changes to statutory sick pay (SSP), with the standard three-day waiting time set to be reinstated for coronavirus-related claims from 25 March 2022.
Under standard rules in the UK, employers do not have to pay SSP to an employee until the fourth qualifying day in the Period of Incapacity for Work (PIW). The PIW is a period of sickness lasting four or more consecutive calendar days, not all of which may be qualifying days. The standard rule, therefore, is to look at the PIW, look at the qualifying days and the first three are called waiting days.
During the pandemic, however, the government suspended the three-day wait for Covid-related SSP, meaning that employers must pay it from the first qualifying day.
Frank Haskew, Head of ICAEW Tax Faculty, explained: “The amendment to the SSP rules was made in the Coronavirus Act 2020, which contains an expiry date. This means that unless there is an intervention to continue the measure coronavirus-related SSP waiting time will automatically revert to three days on 25 March 2022.”
In this event employers will need to:
- Consider two weeks before the end of the 2021/22 tax year any changes that their payroll software may have made to accommodate the suspension of waiting days. This will have the effect of removing ‘coronavirus-related SSP’ and reintroducing waiting days for all absence types.
- Tell employees claiming coronavirus-related SSP from 25 March 2022 that it will be paid from the fourth day qualifying day in the PIW, not from day one.
Following the suspension of the waiting period, small employers were able to recover the cost of the additional three days SSP from HMRC under the recovery scheme (SSPRS). But this scheme ended at the end of September and from this date, employers must cover the additional costs themselves. Any outstanding claims under the SSPRS must be submitted by the end of this year (see HMRC’s guidance).
Haskew said: “The SSP rules were not really designed with a highly infectious global pandemic in mind, which is why the current easements have been welcome. While some employees, who are ill from coronavirus or required to self-isolate, may be unable to afford not to go to work unless they are paid SSP for the first three days, there are also small businesses where the unreimbursed cost of paying three days’ coronavirus-related SSP to employees is a real burden.”