Covid-19: sick pay to be refunded to small businesses

Small businesses will get a refund on statutory sick pay (SSP) during the covid-19 crisis, health minister tells parliament

Health secretary Matt Hancock told MPs during the debate on the Coronavirus Bill that SSP costs for businesses with less than 250 staff will be refunded.

The draft details have been set out in the 329-page Coronavirus Bill, which introduces sweeping powers for the government to enforce strict controls over movement in the country during the covid-19 crisis.

The initial draft proposed that the legislation would be in place for two years, but this has been changed to ensure that it is reviewed on a six-monthly basis.  

On sick pay, the Coronavirus Bill sets out amendments to section 159 of the Social Security Contributions and Benefits Act 1992.

Once full eligibility criteria are confirmed, the SSP refund will be backdated to 13 March 2020.

Although the minister said the refunds would be for ‘small business’, the draft legislation suggests that there may be a degree of flexibility in terms of the size of organisation.

The draft s159B, Funding of employers’ statutory sick pay liabilities in relation to coronavirus, states that if the incapacity for work is related to coronavirus, the employer would ‘be entitled, except in prescribed circumstances, to recover some or all of that payment’.

It also includes ‘provision for a person who has made a payment of statutory sick pay in respect of an employee whose incapacity for work is related to coronavirus to be entitled, except in prescribed circumstances, to recover an additional amount, determined in such manner as may be prescribed’.

Refunds will be handled by HMRC, with details on the procedure not yet confirmed. HMRC will issue guidance in due course.

There will also be strict record keeping measures to stop abuse of the system by unscrupulous employers taking advantage of the refund system.

The Bill also sets out the new zero day activation period for SSP, rather than the current three-day initial wait. The earlier draft SI on zero-day SSP will be dropped as the measure will be part of the overall Bill.

By Sara White

Useful links

Coronavirus Bill, first debated 23 March 2020 

Q&A: coronavirus and statutory sick pay published 19 March 2020, subject to change


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