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Sick Pay Changes

Changes to Statutory Sick Pay

As a result of a number of government initiatives, October 2008 will see many revisions in relation to employer’s requirement to either pay Statutory Sick Pay (SSP) or to issue appropriate SSP forms to employees who may no longer be entitled to payments.

Employment and Support Allowance (ESA)

The Welfare Reform Act 2007, Incapacity Benefit and Income Support will be replaced for all new claims from 27th October 2008 by a new Employment and Support Allowance (ESA).

ESA is designed to help individuals that have health challenges or disabilities to achieve their “full potential”. The aim of the benefit is to help people to return to work by focusing on their abilities and on what they can do as opposed to what cannot be done.

A newly introduced assessment by a medical professional is carried out to explore what actions can be taken to help make the step back to work easier. All new cases must undergo this test. Also, a personal adviser can discuss a full range of support to help improve the chances of returning to work by building on the successful “PathWays to Work” scheme.

Initially the new ESA doesnot apply to pre-existing cases where individuals will continue with their existing benefits.

The introduction of ESA has brought about changes to the information requirements when SSP comes to an end, and the government has also reviewed the current requirement to issue form SSP1L to leavers.

Quicker and simpler – The new SSP1 form

Sickness was referred to as an illness or disability and the employee could make an application for the Social Security benefit known as Incapacity Benefit. Now, you will find that the SSP1 form is given to an employee when Statutory Sick Pay (SSP) stops or is not payable therefore replacing Incapacity benefit.

With the introduction of ESA, the new 7 page SSP1 10/08 form should be used by all employers from 27th October 2008. The Department for Work and Pensions (DWP) claim that the changes to the form “make it quicker to complete” as there is less information required for the new benefit claims:

• Reason A in the ‘I cannot pay you SSP because..’ has been reworded to  “You can claim a social security benefit again, that you claimed before, because of an illness or disability”. All other reason codes and descriptions remain the same.
• Part C has been replaced with ‘none of the original SSP1 04/07 information required’. No longer do employers have to provide details on sickness periods, how much SSP has already been paid, days an employee normally works or linking periods of sickness that may form a single Period of Incapacity for Work (PIW).

The old style 11 page form SSP1 04/07 may still be used after 27th October 2008, but much of the information required on the old form is no longer necessary.

A much loved HMRC form discontinued! – SSP1L

At the moment, employers are required to issue a SSP1L form to any employee who requests one. This is unlike the SSP1 form, which is issued by the DWP and the HM Revenue & Customs (HMRC). The employee will need to have been entitled to SSP in the last eight weeks of work and have been entitled to at least one week of SSP payment. After facing the question ‘why would an employee ever pass on an SSP1L to their new employer?’ the much loved and revered SSP1L form will be discontinued from 27th October 2008. Periods of prior SSP with a previous employer will no longer count towards an employee’s maximum period of SSP with their new employer.

Employers must make note to no longer issue the SSP1L to any employee who leaves their employment on or after 27th October 2008 and to not accept or to take into account any SSP1L for a PIW that commences on or after 27th October 2008. Many employers may find that there is no change in this situation.

Agency workers on short term contracts and SSP

As a result of the Court of Appeal judgment in the case of “Commissioners for HMRC v Thorn Baker Limits and others” (DWP), Ministers have decided to take steps to restore the government’s original policy intention that agency workers with a contract of less than three months are also to be entitled to SSP with effect from 27th October 2008. So be prepared!