Budget 2020: Significant changes to Sick Pay for employees and employers due to Coronavirus

Lee Beaumont profile image

Lee Beaumont, Partner

Lee trained and qualified as a Chartered Accountant (ACA), with a Top 20 regional firm in 2005. He joined Wilkins Kennedy as a Partner in 2013, following the merger with CW Fellowes Limited.

March 17, 2020

statutory sick pay image for insight

On Wednesday 4 March the Government announced changes to statutory sick pay in response to the coronavirus outbreak which were not only confirmed on Budget Day (11 March), but went further than previously expected.  

Statutory payments will now begin from the first day that employees have had to self-isolate due to the Coronavirus outbreak, lifting the standard 3-day waiting period. While this is of course welcome news for some employees, the impact on smaller businesses is as yet unknown. An employee receiving statutory sick pay, currently set at £94.25 per week, will now receive an extra £40.  Businesses used to be able to recover statutory sick pay costs from the government, but this was abolished from 6 April 2014, however considering the current economic situation there were calls from business unions for the government to look to reverse this measure. The Chancellor confirmed in the Budget last week that there will be a loss of productivity for a period, and the economic landscape will be “tough”.  As such the Chancellor announced measures for employers with under 250 employees to recoup costs as they predict that this will affect up to two million businesses.

These measures have also prompted workers unions to ask the Government to consider extending the eligibility of sick pay to zero hour and self-employed workers. Jeremy Corbyn asked the Government what support there will be for those who do not meet the lower earnings limit for national insurance and therefore do not qualify for SSP, and whether they will be “punished” with a five week wait for universal credit. Many of these workers are care staff, who are those employees most likely to be travelling for work and visiting vulnerable people.

The Government have also announced they will provide a £300,000 cash grant to all smaller companies to deal with the impact from the coronavirus outbreak, in addition to a coronavirus business interruption loan scheme.

The question however, is how ready are employers, payroll providers, payroll software developers and HMRC to make, record, monitor and measure these payments? With such a significant change to statutory payments, and with less than a month until the new tax year, there is concern whether these measures will feasibly be implemented from 6 April.

If you have any queries regarding the above, please get in touch with your usual Wilkins Kennedy contact or one of our Payroll specialists.

Related insights and events

Newsletter Sign-up