Reclaiming statutory sick pay costs for SME employees – Who is going to be eligible and how will it work?

15 April 2020

The government has announced that it will bring forward legislation to allow SMEs to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The scheme will repay employers the current rate of SSP that they pay to current or former employees for periods of sickness starting on or after 13 March 2020.

It’s important to note that if you’re an employer who pays more than the current rate of SSP you can only claim the current statutory rate amount.

The scheme will cover up to a maximum of two weeks of sick pay – either because the employee has coronavirus themselves or because they cannot work because they are self-isolating at home. No doctor’s note will be required in order for employers to make a claim.

Which employers will be eligible?

• The scheme is only available to SMEs, defined as businesses that had fewer than 250 employees on 28 February 2020
• Employers must have had a PAYE payroll scheme that was created and started on or before 28 February 2020

The scheme covers all types of employment contracts, including:

• full-time employees
• part-time employees
• employees on agency contracts
• employees on flexible or zero-hour contracts

Connected companies and charities can also use the scheme if their total combined number of PAYE employees are fewer than 250 on or before 28 February 2020.

How do I apply

The government have not yet announced how the scheme will be administered, just that it will be coming soon. Businesses are advised to check for latest guidance once the means of access has been announced: https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19

However, the government has said that employers should keep records of all the statutory sick payments that you want to claim from HMRC, including:

• the reason why an employee could not work
• details of each period when an employee could not work, including start and end dates
• details of the SSP qualifying days when an employee could not work
• National Insurance numbers of all employees who you have paid SSP to

You’ll have to keep these records for at least 3 years following your claim.