The SSP Percentage Threshold Scheme is being abolished at the end of this tax year (5 April 2014). This scheme allows an employer to recover SSP if, in a tax month, the total SSP paid to employees is more than 13% of the employer’s and employees’ National Insurance contributions in the same month. The Scheme is generally used by smaller employers and/or those employers with a high proportion of employees off on sick leave.
HMRC have confirmed that employers will have until the end of 2015/16 to recover relevant amounts of SSP due under the PTS for the periods up to 5 April 2014.
New advisory service to be introduced
The abolition of the repayment scheme is being made to partially fund the establishment of a health and work assessment and advisory service to make occupational health advice more readily available to employers and employees. This will potentially help employers to better manage sickness absence. The new service includes a State-funded assessment by occupational health professionals for employees who are off sick for four weeks or more. The new service is expected to be available by autumn 2014.
Some actions recommended by the occupational health professional may include recommendations for work-focused occupational health interventions, such as physiotherapy. The new service will not pay for these types of costs. The Government has estimated the average cost of interventions as £150-£250 per individual.
If the employer pays for these costs, current tax legislation treats the costs as an assessable benefit in kind to the employee. This will create an income tax liability for the employee and a National Insurance charge for the employer. In order not to deter employees from participating in the suggested health treatment, costs paid for by the employer (up to an annual cap of £500 per employee) will not be subject to income tax or National Insurance.
Additional costs for the employer
Clearly the removal of the SSP repayment scheme and the potential employer funding of some treatment costs will result in extra direct costs being incurred by an employer. But the Government considers these costs will be outweighed by the indirect savings that will be made by getting an employee back into productive work.
It is unfortunate there is a gap between the withdrawal of the SSP repayment scheme and the introduction of new health and work assessment advisory service.
However, there is some help available for small and medium sized businesses. There are occupational health advice services in England, Scotland and Wales which are funded by the Department of Work and Pensions. This service is called the ‘Health for Work Adviceline’. You also access help and information from them on Twitter (@Health4Work) or Facebook if you’d prefer. They will be able to help you if you’d like some assistance in respect of an employee with health issues.
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