Employers able to recover statutory sick pay this month, government says

Rebate scheme announced in March will open end of May, but experts warn small firms may not claim because launch took so long and the administrative burden is too high

Employers will be able to recover statutory sick payments made to staff during the coronavirus pandemic at the end of this month, the government has announced. 

The coronavirus statutory sick pay rebate scheme, which was announced during the budget in March as part of a package of support measures for businesses affected by the crisis, is set to launch on 26 May. The scheme will allow employers with fewer than 250 employees to recover the costs of paying coronavirus-related statutory sick pay (SSP). 

Employers will receive payments at the relevant rate of SSP, currently £95.85 per week, paid to current or former employees unable to work as a result of being ill with coronavirus, self-isolating and unable to work, or shielding because they’re at ‘high risk’ of severe illness from coronavirus. The repayment will cover up to two weeks of SSP for eligible periods of sickness starting on or after 13 March.

Thérèse Coffey, secretary of state for the Department for Work and Pensions, said the UK government was committed to supporting small and medium-sized businesses through the pandemic. She added: “This rebate will put money back in the pockets of millions of employers, ensuring they can hit the ground running as the economy reopens.”

Rachel Suff, senior employment relations adviser at the CIPD, welcomed the scheme. She said the pandemic and the need for a number of people to self-isolate in line with government advice meant many employers have had to cope with increased levels of sickness absence. "Many of them will also typically operate within tight budgetary constraints, so this extra financial support from the government is needed,” she said.

The coronavirus SSP rebate scheme will cover all types of employment contracts, including full-time and part-time employees, agency workers and those on flexible or zero-hours contracts. 

Get more HR and employment law news like this delivered straight to your inbox every day – sign up to People Management’s PM Daily newsletter

The scheme guidance said employers could furlough staff who had been advised to shield in line with public health guidance and were consequently unable to work. But once furloughed, the individual should no longer receive SSP and instead receive furlough pay, the guidance stated. 

Where an employee has been notified of the need to shield and has not been furloughed, employers can claim an SSP rebate for up to two weeks from 16 April.

Kate Palmer, associate director of advisory at Peninsula, said the new scheme, alongside the furlough scheme, offered more assistance to employers that had seen staff take sick leave as a direct or indirect result of coronavirus. It was not yet clear whether this support would be extended to larger firms, she said.

"It is interesting that, unlike the furlough scheme, this assistance is only open to companies of a certain size, suggesting the government is aware that meeting SSP costs is likely to be more difficult for smaller businesses," Palmer said. "It remains to be seen if eligibility for reclaiming SSP will be broadened to include larger companies, and it is likely any decisions in this manner will come as we move through the crisis.”

Roger Tynan, partner at gunnercooke, agreed the rebate scheme would be welcomed by employers. However, he asked why the scheme was being rolled out so long after the furlough scheme and after the announcements that SSP would be paid to all those advised to self-isolate, even those without symptoms, and that it would come into force from the first day of absence rather than after three days.

"What puzzles me is why it's taken until now to launch this when people have been ill, had to isolate and the UK is now past the [infection rate] peak," Tynan said. "Why wasn't this a priority at a much earlier stage in the pandemic when we were really seeing a huge increase in infection rates and people were having to self-isolate?" 

Because of this delay, he questioned whether many employers would take advantage of the scheme, particularly as many paid above SSP and the rebate only covered SSP for a two-week period. "There's still the bulk of any cost of a long-term absence being borne by the employer," Tynan said. 

He added that the scheme, which requires employers to keep records of SSP they have paid and intend to claim back from HMRC, would be an administrative burden beyond the HR resource available to most small and medium-sized employers.

"How good are these firms going to be at keeping written records on the reasons for people's absences, especially potentially two months after the fact?" Tynan said. "I think this is going to be an issue for smaller organisations that don't have that HR capability or have limited capability, as they quite commonly outsource the HR function."