End of the Statutory Sick Pay percentage threshold scheme

by Tax Faculty Team on 25.11.2013 13:39


The scheme will be abolished from April 2014 but employers have until April 2016 to recover SSP for 2013/14 and prior years 


The DWP is taking steps to abolish the statutory sick pay (SSP) percentage threshold scheme (PTS) at the end of the 2013/14 tax year. The PTS compensates employers for higher-than-average sickness absence. An employer is entitled to recover some of the SSP paid to their employees if the total SSP paid in a tax month is greater than a set percentage of their gross Class 1 NICs (employers’ and employees’) liability for that month. 

  • After the PTS is abolished, employers will have until the end of 2015/16 to recover SSP paid for sickness absences occurring before the end of 2013/14.

  • The associated SSP record-keeping requirements will also be abolished at the end of 2013/14. Employers will, however, still be required to maintain records for PAYE purposes and to demonstrate they are meeting their SSP obligations. 

The PTS is being abolished because an independent review of sickness absence showed that it has not encouraged employers to manage sickness absence in the workplace – see Fitness for work: the Government response to Health at work: an independent review of sickness absence. 

As a result, the Government decided to abolish the scheme and reinvest the money in a new Health and Work Service. This aims to provide an alternative form of support that will benefit employers by enabling employees on sickness absence to return to work (where possible) more quickly and by assisting employers to manage sickness absence better. Details are on the Health, Work and Wellbeing initiative site on Gov.uk.