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Reclaiming statutory sick pay costs for SME employees – Who's eligible and how does it work?

The Government announced legislation to allow SMEs to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The scheme repays employers the current rate of SSP that they pay to current or former employees for periods of sickness starting on or after 13 March 2020.

It’s important to note that if you’re an employer who pays more than the current rate of SSP, you can only claim the current statutory rate amount.

The scheme will cover up to a maximum of two weeks of sick pay – either because the employee has Coronavirus themselves or because they cannot work because they're self-isolating at home. No doctor’s note is required in order for employers to make a claim.

Which employers are eligible?

  • The scheme is only available to SMEs, defined as businesses that have fewer than 250 employees on 28 February 2020
  • Employers must have had a PAYE payroll scheme that was created and started on or before 28 February 2020

The scheme covers all types of employment contracts, including:

  • Full-time employees
  • Part-time employees
  • Employees on agency contracts
  • Employees on flexible or zero-hour contracts

Connected companies and charities can also use the scheme if their total combined number of PAYE employees are fewer than 250 on or before 28 February 2020.

How do I apply?

You can find more details on how to claim here.

The Government has said that employers should keep records of all the statutory sick payments that you want to claim from HMRC, including:

  • The reason why an employee could not work
  • Details of each period when an employee could not work, including start and end dates
  • Details of the SSP qualifying days when an employee could not work
  • National Insurance numbers of all employees who you've paid SSP to

You’ll have to keep these records for at least three years following your claim.

This article was first published on the Close Brothers Coronavirus Resource Hub.