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Small employers hit hardest by abolition of the recovery of statutory sick pay from 6 April 2014

28 March 2014 #Employment

Since 1995, employers have been able to reclaim statutory sick pay (SSP) from HMRC, provided  he total SSP paid in a month exceeds 13% of their Class 1 National Insurance Contributions for that month. The government has now pushed through Parliament a draft order to abolish the recovery of SSP. This measure, announced in January 2013, is expected to take effect on 6 April 2014.

According to the government’s impact assessment, 70% of the recovery of SSP benefits small employers. Abolition of the scheme will therefore impact disproportionately on small employers. The government maintains that part of the rationale for abolishing SSP recovery is to fund the introduction of the new Health and Work Service which will offer voluntary medical assessments and treatment plans for employees, and is intended to deliver substantial savings to employers by reducing days lost to sickness absence. However, the service is not expected to in place until 2015. Small employers will receive no compensation for the loss of SSP recovery during the intervening period.

The government says that small employers are expected to benefit "disproportionately" from the new Health and Work Service, small employers being the least likely to have access to Occupational Health services.

An independent report in November 2011 found that SSP recovery costs the Treasury £50 million a year. It recommended abolishing it on the basis that it rewards employers with higher absence rates and gives no incentive to reduce them.

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
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