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Statutory Sick Pay (SSP) – How does it work?

The current economy has driven many employers to be unable to offer proper employee benefits such as sick pay. This means that more people than ever are relying on Statutory Sick Pay (SSP) to survive if they’re not able to work due to sickness or an accident.

Recent events such as the Pandemic and Cost of Living Crisis have also clearly shown us how delicate and fragile life can be. Many of us have been forced to look at how we would cope if we were unable to work or think about how you could manage.

What is Statutory Sick Pay (SSP)?

If you’re unable to work for more than 3 consecutive days then you might be entitles to claim Statutory Sick Pay.

Statutory Sick Pay is a basic rate of sick pay that is paid by employers in the United Kingdom to employees who are unable to work due to sickness. SSP was introduced in 1983 to introduce a set standard payment for sickness absences from work over longer periods of time.

The initial plan and purpose was to provide financial support to employees for up to eight weeks. This was later extended in 1985 to the current 28 week period of absence.

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Statutory Sick Pay rates are reviewed each year and the new rates are introduced in April at the beginning of the new Tax Year. Generally SSP rates and Lower Earnings Rates will increase to roughly track inflation and cost of living for people in the United Kingdom.

The current rate of Statutory Sick Pay is £109.40 per week to be paid for your first 28 weeks of absence from sickness.

Our table below shows the historical rates of SSP and the Lower Earnings Limits to qualify for Statutory Sick Pay. As you can see from this table, the rates have not changed significantly in the past 15 years.

How long is Statutory Sick Pay?

In the event of sickness then you can claim Statutory Sick Pay for up to 28 weeks or until you are fit to return to work, whichever is sooner.

Will I pay tax on Statutory Sick Pay?

While it’s true that Statutory Sick Pay is taxable and you would be required to pay Income Tax and National Insurance on any payments, in reality you are unlikely to pay any tax because of the small amounts.

Statutory Sick Pay contributions are currently £109.40 per week, which is well below current tax thresholds:

What are the rules for Statutory Sick Pay?

There are several basic criteria to qualify as eligible for Statutory Sick Pay (SSP) under the current regime.

Criteria for being eligible for Statutory Sick Pay (SSP):

Only available to employees or agency workers (including full-time, part-time and agency staff)

Sick leave MUST be more than 3 days in a row (sickness of 4 days including non working days)

Average earnings must be over £123 per week

It is true that lots of people will qualify to claim Statutory Sick Pay but it isn’t automatic so you will need to check before you claim. If you aren’t eligible for SSP then you might be able to look at alternative support that may be available to you, such as:

Can anyone get Statutory Sick Pay (SSP)?

As we mentioned above, it is likely that you’ll be able to qualify for Statutory Sick Pay or something similar.

Unfortunately, not everyone will be entitled to SSP based on the current regime and rules. If you are employed in England, Scotland or Wales then it is likely that you will qualify for SSP.

Employees not eligible for Statutory Sick Pay:

  • Already received the maximum period (28 weeks)
  • Receiving Statutory Maternity Pay or Maternity Allowance
  • Off work due to sickness related to pregnancy (during 4 weeks before due date)
  • In custody or on strike (on first day of sickness)
  • Working outside the EU and not eligible for NI contributions
  • Received Employment and Support Allowance within 12 weeks of start date or returning to work

Who pays Statutory Sick Pay?

It is a legal requirement that employers MUST pay Statutory Sick Pay to its eligible employees as a minimum. Employers can ask for a sick note (fit note) if their employee is off for 7 days (including non working days).

Employers then begin paying SSP on the 4th ‘qualifying day’ – the 4th working day after the employee notified them of being sick.

Statutory Sick Pay is paid to a companies employees by the employer either weekly or monthly, depending on how it pays normally. People with more than one job may also be paid SSP by each employer.

What should I do if my Statutory Sick Pay is wrong?

If your employer has paid your Statutory Sick Pay incorrectly or if you are told that you are not eligible, then you have the right to appeal.

Can I claim Statutory Sick Pay for more than one job?

It is possible to claim Statutory Sick Pay for more than one job if you work multiple jobs and qualify. You will need to claim SSP from each employer and they should calculate the amount based on your Tax and National Insurance contributions.

You can also claim SSP from one employer and continue to work in another job if you are fit to do so. It is possible that you might only be able to continue with certain jobs but be unable to perform other roles.

How does Statutory Sick Pay (SSP) help employers?

Statutory Sick Pay provides employers with extra financial protection against loss of earnings from long-term absence. It provides employers with a minimum legal requirement for payment of sick pay, and then any additional entitlement that they wish to pay.

Some employers will have their own sick pay policy which can provide payment for the first 3 days of absence for example, or longer-term financial support. Employers sick pay policy is separate to Statutory Sick Pay but can still have an element of it or reference to it.

How does Statutory Sick Pay for self employed people work?

One of the biggest draw backs with being self employed is that you lose any employee benefits, including Statutory Sick Pay. If you are self employed then there are alternative benefits that you may be eligible for as mentioned above (e.g. Universal Credit and/or New Style ESA Employment Support Allowance).

Anyone considering becoming self employed should carefully consider all of these scenarios and potential problems. It is always wise to be fully prepared and properly informed before making any major decisions, such as leaving employment.

What to do to prepare for sickness if you’re self employed:

  • Make sure that you have enough savings if you are unable to work due to sickness
  • Consider income protection insurance
  • Speak to your accountant about possible options
  • Make sure that you know your outgoings

What else can I do to protect myself?

You should consider the impact of long term or short term sickness and how it would affect you financially and emotionally, especially if you are self employed.

There are a number of steps that you can take to protect yourself and your loved ones against financial difficulties due to sickness. Most absences are short term and luckily don’t have a major impact on people, but longer term sickness can be a major issue for many.

Things that you can do to protect your family against financial difficulty from long term sickness:

Savingsif you are in a position to apply a pot of savings for long term sickness then you can give yourself a buffer to allow for periods of reduced income.

Outgoingsyou might also be able to reduce your outgoings significantly by speaking to certain providers and lenders. Some organisations will have a policy and procedure to allow for payment problems due to sickness.

Income protection insurancethis type of policy can provide you with a monthly payment that replaces your income during periods of sickness. Income protection insurance will usually pay out for up to 12 or 24 months of absence to pay for normal outgoings.

Citizens Adviceyou can also refer to Citizens Advice for free advice and guidance to help with financial support for sickness.

Sick pay insurancethere are also other types of insurance products such as sick pay policies that can help during absences due to sickness.

Personal accident insuranceif you’re injured due to an accident then a personal accident insurance policy can pay out a lump sum to help you with short term financial commitments.

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Is it worth having income protection insurance?

Income protection insurance can be extremely useful and very important for anyone who is unable to work due to sickness or an injury (e.g. from an accident, sports, work etc.). Essentially, income protection insurance pays out monthly to replace any lost earnings while you are unfit or unable to work.

Payments for income protection insurance can be used to pay your mortgage, rent, other credit commitments, food bills, utilities and other regular outgoings.

Common myths about income protection insurance:

  • Income Protection Insurance won’t pay out
  • Statutory Sick Pay (SSP) from the government will cover me
  • The cost of Income Protection Insurance is high
  • People with medical conditions can't have Income Protection Insurance
  • My employer will help support me
What does income protection insurance cover?

As a rule of thumb, income protection insurance will pay out a regular monthly tax-free payment to you if you can’t work and you are signed off by a doctor. You will need to provide supporting evidence from a medical professional such as your GP and proof of income from your employer or accountant.

Example: Sarah was involved in a car accident which resulted in a serious back and neck injury that prevented her from being able to drive for 6 months. She was able to claim on her income protection policy after 4 week for the remaining 5 months until she was able to move and drive again. She would also usually be able to claim for rehabilitation and physiotherapy to help her to return to work as planned.

Do I need income protection insurance for a mortgage?

Income protection insurance and mortgage life insurance are not compulsory for getting a mortgage in the United Kingdom. Some mortgage lenders might ask for you to get insurance as a condition of the mortgage offer in some circumstances but this is rare.

It is strongly recommended to have insurance to protect you and your family if you have a mortgage and other credit commitments. If you consider what the financial impact would be if you were unable to work due to accident, sickness or injury, and even if you were to die.

Most common mortgage protection insurance policies:

  • Buildings insurance
  • Mortgage life insurance
  • Income protection insurance
  • Critical illness insurance
  • Mortgage payment protection insurance (Accident, Sickness & Redundancy
Is income protection insurance tax free?

Payments from an income protection insurance claim are almost always tax-free, apart from some business income protection policies. This is because you pay tax on the premiums for personal income protection insurance at source (i.e. the premiums are paid from your net monthly salary).

The same applies to life insurance premiums and payouts, effectively you have already paid tax on the premiums that you have paid. There are some other possible tax implications that may apply in certain circumstances so you should seek proper advice or guidance if you have any specific questions.

Which is the best income protection insurance UK?

It’s very difficult to say overall which income protection insurance policies or providers are the best, simply because there are so many different options and types of cover. You can get income protection insurance from an even wider range of insurance providers than life insurance, so your choice is even greater.

The most common income protection insurance policy is:

  • Short term income protection insurance (24 months)
  • 4-week deferred period (pays out after 1 month of absence)
  • Guaranteed premiums (fixed premiums)
  • Underwritten income protection insurance

There are several other cover options for income protection insurance (e.g. long-term, age rated, reviewable premiums, guaranteed acceptance and 0 weeks to 12 months deferred periods).

The top 5 income protection insurance providers according to research by Defaqto are:

  1. Aviva (Trustpilot score: 4.0 out of 5.0)
  2. British Friendly Society (Trustpilot score: 4.1 out of 5.0)
  3. LV= (Trustpilot score: 4.5 out of 5.0)
  4. Royal London (Trustpilot score: 4.0 out of 5.0)
  5. Shepherds Friendly (Trustpilot score: 4.3 out of 5.0)
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