SSP entitlement
In general, every person who has started working for you, and is therefore an employee, is entitled to SSP from day one. SSP is a flat rate weekly amount that is divided by the number of days that would normally be worked by the employee and then multiplied by the number of days that qualify for payment of SSP.
Every employer has to make SSP payments, or payments of an equal or greater amount, to employees that qualify. There are certain professions and work contracts that have different qualifying conditions, but for a normal every day business it is fairly straight forward.
To qualify an employee must
- earn the Lower Earnings Limit for NI a week or more
- pay national insurance contributions if their wages were high enough or the employer pays national insurance contributions on the employees wages
- have a Period of Incapacity for Work (PIW) of at least 4 days or
- have a PIW within the last 8 weeks and qualified and a new PIW of at least 4 days
- have been paid less than 28 full consecutive weeks of SSP in the current PIW
there are other qualifications but these are the more relevant ones. The old rule that some temporary / part time / 'casual' staff have to wait 13 weeks to qualify was abolished in 2002.
PIW
The Period of Incapacity for Work includes all days of the week whether a normal work day or not. A qualifying PIW must have a minimum of three normal working days off plus one more day, the additional day need not be a normal working day. A qualifying PIW need not include a payment of SSP. An example of a qualifying PIW with no payment being made would be a person that works Mon - Fri, the first day off is Wednesday, they do not work again until Monday of the following week and are sick until Sunday. As they have three work days off and have a period of sickness of four or more days it is a qualifying PIW that can be used to link two periods together.
Waiting days
The first three days of an un-linked (no previous SSP in last 56 days) PIW do not qualify for SSP payments, they are called the waiting days. If an employee only ever has periods of three days sick then they will never receive an SSP payment, it is only paid from the fourth day onwards.
If there has been a previous qualifying PIW, paid or not, within the last 56 days or 8 weeks and the current period of sickness is for four working days or more then there are no waiting days, SSP will be paid from the first working day of the period of sickness. If there is a period of three years of continuous linking periods then special rules come into force.
Payment
The weekly rate is set by law, for 2011-12 it is £81.60. Payments are subject to PAYE tax and NIC and any other usual deductions.
To calculate how much is actually paid the flat rate is divided by the number of days usually worked during the week (Sun - Sat) to arrive at a daily rate i.e. four days usually worked the daily rate would be a quarter of the weekly rate, three days worked ~ daily rate one third of weekly rate.
For each day off that is also one of the usual days of work used in the daily rate calculation, as long as it is not a waiting day, a days SSP is paid. No payment can be made until all the waiting days have passed i.e. after four consecutive work days have been taken off one days SSP is due. Although calculations are based upon a weekly amount the actual payments can be made at any frequency.
After 28 weeks of payment the employee is not entitled to any further payments and must be advised of this. Usually this is done during the 23rd week of claiming on form SSP1, they then may be entitled to claim for Incapacity Benefit from the Benefits Agency.
SSP whilst on holiday
If an employee is on holiday and they fall ill they can claim SSP. The employee will have to produce a 'sick note' and return any pay already made for the days off ill. The days of illness during the holiday will have to be added back onto the untaken days of accrued holiday and be taken in the normal manner at a later date. This decision seems to go against the fact that you had to be working to be off ill; being on holiday is definitely not 'working',
Recovering SSP payments
If your total yearly Class 1 NIC's are below a certain amount you may be able to recover some or all of the SSP you have paid out.
Compare 13% of the total NIC's due for the tax month against the total SSP paid through the same tax month. If the SSP is greater than the NIC calculation then you can recover the difference between the two by deducting it from your Revenue payments.
As you can see, the more NIC's that you pay to the Revenue the less subsidy for SSP payments you get.
