Statutory Sick Pay - New form SSP1 and social security benefit linking

3 January 2008

Form SSP1 is issued by employers to inform their employees that SSP cannot be paid for a new sickness absence, or continue to be paid for an ongoing sickness absence. The employer ticks one of the 11 boxes provided to indicate the reason for not paying, or not continuing to pay, SSP. The boxes are lettered, from A to K.

Having received the completed SSP1, an employee uses the form to support a claim for Incapacity Benefit (IB), the current social security benefit for people who have an illness or disability. During 2007/08, the three rates of IB are:

the short term lower rate of £61.35 (non-taxable), paid for up to 28 weeks to employees who did not qualify for SSP

the short term higher rate of £72.55 (taxable)(the same rate as SSP), paid for a further 24 weeks after 28 weeks at the short term rate, or after 28 weeks of SSP

the long term basic rate of £81.35 (taxable), paid from the 53rd week of sickness.

Extra IB may be paid for the spouse or civil partner of individuals with dependent children.

So that Jobcentre Plus can determine the correct rate of IB to pay to an employee who has been receiving SSP but not longer qualifies to receive it, the employer has to enter on form SSP1 details of the SSP already paid to the employee, the employee's qualifying days and SSP payment history.

If an employee who has been in receipt of IB returns to work but is then absent sick again, entitlement to IB may resume if special linking rules apply. This is obviously advantageous to an employee who was already receiving IB at the higher, long term rate. Even if the employee was receiving the short term higher rate (the same as the SSP rate), payment at the higher, long term rate starts after 52 weeks, which includes the previous period for which IB was paid.

The linking rules are as follows:

8-week linking - the normal linking period is 8 weeks, the same as the SSP linking period

52-week linking - to qualify, employees must have

been sick continuously for 28 weeks (not counting Statutory Sick Pay)
started work or training within 7 days of leaving Incapacity Benefit, and
told the office that pays their IB that they have started work or training within one month of the date of starting.

104-week linking - to qualify, employees must have

left Incapacity Benefit to return to work
been getting short-term Incapacity Benefit (higher rate) or long-term Incapacity Benefit
qualified for the disability part of Working Tax Credit
not been able to work because of their illness or disability from the day after finishing work, and
not been able to work because of their illness or disability within 2 years of last receiving Incapacity Benefit.

If an employee is entitled to resume receiving IB because of qualifying under the rules for one of these linking periods, the employer is not required to pay SSP for the continuing sickness absence. In order to avoid paying SSP in these circumstances, employers must be aware of their employees' ongoing entitlement to IB if they are absent again within 8 weeks, 52 weeks or 104 weeks, as appropriate, of an earlier period of entitlement to SSP. On coming off IB, beneficiaries are issued with a "linking letter" (designated BF220, BF220A or BF220C) to give to their employer. The letter provides the date up to which the employee is entitled to resume IB if absent due to sickness or disability again.

To avoid paying SSP unnecessarily to employees who are entitled to resume IB, employers should, as part of routine employee administration, ask

all new employees who are sick for four or more days in a row in their first 2 years of employment, and

all employees returning to work from sickness absence,

if they have been issued with a linking letter. If they say that don't have one of the forms and the employer suspects that they have been in receipt of IB within the previous 2 years, the employer should check with Jobcentre Plus or, in Northern Ireland, the Jobs and Benefit Office, to see if they are entitled to IB.

From October 2008, Incapacity Benefit will start to be replaced by a new benefit, Employment and Support Allowance (ESA). It will be paid to individuals who

have an illness or disability,

have not claimed IB within the past 2 years, and

are not entitled to SSP or are no longer entitled to SSP.

ESA will also have linking rules - a 12-week linking period and a 104-week linking period. Applicants for ESA will have to undergo a new Work Capability Assessment and, if the assessment shows that, despite their illness or disability, they are still capable of working, they will not be given ESA but given instead the support and skills needed to get a job. IB will continue to be paid to individuals who retain entitlement to it under the linking rules.

As a result of the introduction of ESA, form SSP1 is being amended so that ongoing entitlement to both IB and ESA are shown as reasons why the employer cannot pay SSP. Also, as the rate at which ESA will be paid does not depend on the length of an employee's sickness absence, the new form no longer has a section for the employer to enter details of the SSP already paid to the employee, the employee's qualifying days and SSP payment history.

The current SSP1 allocates a letter, A to K, against the 11 reasons why the employer cannot pay SSP. The draft version of the new SSP1 form lists 12 reasons but the letters allocated to each, A to L, differ from those used for each of the disqualifying reasons. Unless there is a change to the final version of the form, this means that payroll systems that produce reports for the different disqualifying reasons will require some coding changes.

...UK Payroll News - Latest

Source:
Incapacity Benefit
SSP1 draft notes
SSP1 draft form
Work is good for you: new medical test to assess work capability - Hain

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