From 6 April 2014 recovery of SSP paid by employers under the percentage threshold scheme will be abolished.
What does this mean?
Under the current rules, employers with higher than average sickness absence are able to reclaim some of the SSP paid to their employees. If the total SSP paid to their employees in a tax month is greater than 13% of the gross Class 1 NIC’s (Ee’s & Er’s) liability for that month, the employer is entitled to recover the excess above this amount.
Therefore under the new guildelines employers will no longer be entitled to recover any SSP paid.
Who will be affected?
The hardest hit by this change will be small employers. For such employers who perhaps only have a few part time staff, the cost of SSP can be high. The percentage threshold helped compensate small employers for the unexpected consequence of staff sickness. It provided at least some sort of insurance against what could be a threatening cost to small employers.
Why has this change happened?
The government decided to abolish the scheme in order to reinvest money into the new Health & Work Service which is expected to be introduced by the end of 2014. This aims to provide an alternative form of support that will benefit employers by enabling employees on sickness to return to work (where possible) more quickly. It will also help to assist employers to manage sickness more effectively. For more details on this please visit the Health, Work and Wellbeing Initiative at gov.uk.
You might also like to read about Beneficial Loans.