No Longer Reclaimable – Statutory Sick Pay

The Government is to launch a new Health and Work Service that will offer a helpline and website from April 2015.  This will also provide for free occupational health assessments where the employee has been off sick for a period longer than 4 weeks. The idea is that it will help employers save money by getting employees back to work quickly.

As they say there is no such thing as a free lunch.  There is a sting in the tail which has not been overly publicised.  The Government currently has a percentage threshold scheme whereby employers could reclaim any amount of statutory sick pay which exceeded 13% of its national insurance contributions in any month.  This costs the State an estimated £50 million a year.  This has been abolished from 6th April 2014 so the savings from this scheme will fund the new Health and Work Service next year. The rationale for abolishing it was that it gave employers an incentive not to encourage long term sick workers back into the workplace.

Certainly in the interim this will create an additional costs burden on employers.  The rate of SSP will also increase at the same time by 1% so to £87.55 up from £86.70 per week.  Another change is to the administration of sick pay and the government will abolish the statutory sick pay record-keeping obligations and allow employers to keep records in a flexible manner more suited to their organisation.

Written by
Edward Aston
11th April 2014

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