Statutory Sick Pay - in more detail

Statutory Sick Pay (SSP) is a minimum level of sickness benefit which all employers must pay their employees regardless of length of service.  SSP is payable only to those employees whose average earnings are over the lower earnings limit for National Insurance. The current amount is available from the Salaries Section.

The SSP regulations are very complex and it is not proposed to give an exhaustive recitation of them here. There are however several important concepts which should be noted and some procedures which, if not adhered to, would leave the University liable to penalties which include both fines and imprisonment.

SSP Terminology

  • Qualifying Day - Monday to Friday inclusive (see also: notification of sickness).
  • Period of Incapacity for Work (PIW) - a period of 4 or more days of sickness. A PIW can include weekends and rest days.
  • Linked PIWs - two PIWs separated by a period of 8 weeks (56 days) or less.
  • Waiting days - the first three qualifying days in a PIW. SSP is not payable for these days. If two PIWs are linked only one set of waiting days needs to be served.
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Exclusion from SSP

Most employees are eligible for SSP immediately they have done any work under their contract of employment. There are exceptions to this rule and an excluded employee must be issued with form SSP 1. Forms SSP 1 will be issued by the Salaries Section who must be informed by the relevant Departmental Administrator if an employee falls into any of the excluded categories. Failure to issue form SSP 1 can result in substantial fines.

The following employees are excluded from the SSP scheme:

(a) employees who have done no work under their contract of employment. Effectively this means employees who do not attend for their first day of work because they are sick.

(b) employees who are over age 65. There is no SSP due for a PIW which commences after an employee reaches the age of 65 unless the PIW links with a previous PIW which commenced before the employee's 65th birthday. The age 65 exclusion applies to both men and women.

(c) employees working abroad. SSP is payable to employees where the University is liable to pay employer's Class 1 NICs and the employee was working outside the UK on the first day of the PIW.

(d) employees whose first day of sickness occurs during a stoppage of work due to a trade dispute. If however the employee can prove that at no time did he or she have an interest in or participate in the dispute, SSP becomes payable.

(e) employees who were recently in receipt of certain social security benefits. Any employee who has had, in the 57 days prior to the first day of a PIW, entitlement to incapacity benefit, severe disablement allowance or maternity allowance will be issued with a 'linking letter' by the Contributions Agency. It is important that you ask any new employee if he or she has such a 'linking letter' and, if so, forward it to the Payroll Department immediately.

(f) employees whose average earnings in the eight weeks prior to the first day of a PIW are less than the lower earnings limit for National Insurance. If the employee is new and an eight week average cannot be established then the contractual pay can be used.

(g) employees who have reached their maximum entitlement. Eligible employees are entitled to 28 weeks of SSP in any PIW or series of linked PIWs. Once this has been paid, eligibility ceases until the employee has returned to work for at least 8 weeks when SSP eligibility resumes.

(h) employees who are pregnant and who are either:

  • (i) within the 18 week disqualifying period which spans the expected week of confinement (EWC) (for employees entitled to either Statutory Maternity Pay (SMP) or the Maternity Allowance (MA); or
  • (ii) within the 18 week disqualifying period which begins the day after the baby is born or the day after the first day they are absent from work with a pregnancy-related illness on or after the begining of the 4th week before the ECW; or
  • (iii) sick with a pregnancy-related illness in the 6 weeks before the EWC. The SSP entitlement of a pregnant employee should always be discussed with the Payroll Manager as great care is needed in determining the correct amount.

(i) employees whose contract of employment has ended. There is no liability to pay SSP after the termination date.

(j) employees who are in legal custody. Liability to pay SSP ceases on the day that the employee is taken into legal custody and a PIW is deemed to end on that date.

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Offsetting of SSP

Where an employee is entitled to contractual pay (for example occupational sick pay) and SSP for the same day then the payment of the contractual pay, provided it is at least as much as the relevant day's SSP entitlement, satisfies the SSP regulations.

Employees of the University who are on sick leave will not see SSP itemised on their pay statements while they are receiving full pay. When the employee is in receipt of half pay, SSP will be paid in addition to contractual pay. Employees who have exhausted their occupational sick pay entitlement will be paid SSP only.

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Exhaustion of entitlement to SSP: transfer to state benefit

It may sometimes be the case that an employee who has been in receipt of SSP will need to start to claim State Benefit instead. The Contributions Agency form SSP 1 is intended to give the employee early warning that SSP may be coming to an end.

This may happen in the following circumstances:

(i) the employee reaches his or her maximum entitlement. This is normally 28 times the appropriate weekly rate in any one period of incapacity for work (noting that linked PIWs count as one), although it may be reduced in certain cases depending upon information given by the previous employer in a leaver's statement (if applicable);

(ii) the period of sickness which counts for SSP purposes lasts for more than three years. As noted, linked PIWs (with the same employer) count as one and in very rare cases a linked PIW could run on more than three years after its start, without exhausting the maximum of 28 weeks of SSP (e.g. a large number of four-day illnesses, each linked and separated by exactly eight weeks). Employer's liability stops, however, at the end of that third year;

(iii) the employee goes outside the EEC or is taken into legal custody;

(iv) the contract of service comes to an end, either by resignation or dismissal.

If an employee's sickness continues after no more SSP is due, he or she may be eligible for a state benefit. To make the transfer to the State Scheme as smooth as possible, the employer is required by law to give the employee a form SSP 1. It has to be issued at the beginning of the 23rd week of SSP; or if liability is due to end before the 23rd week of SSP (e.g. if employer's liability is reduced because of SSP with a previous employer), then two weeks before the date the liability is due to end. If liability ends unexpectedly before the 23rd week of SSP, the form should be issued as soon as it is known that this will happen or has happened.

It should also be emphasized that a SSP 1 form does not automatically bring SSP to an end from its date of issue - its main use is as an 'early warning' that, if sickness continues, SSP will end on a given day, for one of the reasons stated on the form.

If the employer's liability to pay SSP is ending because of the '28 weeks' rule (see (i) above), then the Salaries Section will issue a form SSP 1 to departments to the appropriate time and return any sickness certificates. However, in the case of transfer for any of the other stated reasons it is the department which will have the fullest information and should notify the Salaries Section. Departments are therefore asked to note carefully the timetable for the issue of SSP 1 and to take action accordingly.

If a SSP 1 is to be issued, it will be completed by the Payroll Section and sent to the employee at the appropriate time. Any doctor's sick notes that relate to the period for which SSP is still payable should be retained and sent to the Payroll Section; but any doctor's notes that cover sickness after SSP is due to end should be sent back to the employee with SSP 1. The rest of SSP 1 is a claim form for State sickness benefit or invalidity benefit for the employee to complete and send to the DSS office if he or she is still sick after the date on which entitlement to SSP ends. The employee's attention may be drawn to Contributions Agency arrangements for sick notes etc., which have different timings from those operating in the University.

When SSP 1 is issued, it is ESSENTIAL to inform the Payroll Section if the employee is still off sick after the 'end date' for SSP is reached. If this is the case, the Sickness Absence Record Form should be signed and sent to the Salaries Section promptly. It is important that the form be sent at this time so that the Salaries Section will be alerted to the need to deduct a sum equal to State sickness benefit from the individual's pay. The fact that the employee has not yet returned should be noted on the form and a further form should be submitted as soon as the employee returns, quoting, in question 7, the previous reference.

PLEASE NOTE that if an employee who has been 'transferred' from SSP falls sick again after returning to work, and there is a new PIW, it will be necessary to consider again his or her entitlement to SSP. If the new PIW links, there is still no entitlement to SSP; if it does not link, then the Administrator should consider the entitlement from the start of the PIW in question.

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SSP - Leaver's statement

Any employee leaving the University's employment, who has received at least one week's SSP in the eight weeks before the date of leaving, should be given a 'leaver's statement', showing SSP payments. This should be retained and handed over to the new employer.

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