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Voluntary paymeets
I have no-one to run this by and I am thinking this out, so could someone just confirm whether my ramblings are right or not?
Client has been on SSP from 17/02/22 to 19/09/22. as this exceeds 28 weeks then I believe there is some holiday pay in there. Employer has paid full pay all the way through, and appears to be willing to continue to pay full pay until client goes back to work. So this is now a voluntary payment.
Employer has said that they will not issue an SSP1 until they stop paying full pay. This doesn’t seem to be a major disadvantage to the client, who will still be ok for NSESA in this benefit year or next but I am puzzled. If they issued an SSP1, and still continued to pay full pay as a voluntary payment, then client could get NSESA and full pay, and so be paid more than normal full pay. Which may be legally correct, but just doesn’t seem right to me somehow?
Thanks
Perhaps you could ask your client for a copy of their contract of employment, because what they are receiving could be contractual sick pay rather than a voluntary payment. However, this is only a technicality, and doesn’t change the SSP1 situation.
The employer should be issuing SSP1 now and client is entitled to claim new style ESA regardless of what the employer is paying them.
Perhaps you could ask your client for a copy of their contract of employment, because what they are receiving could be contractual sick pay rather than a voluntary payment. However, this is only a technicality, and doesn’t change the SSP1 situation.
Thanks Ruth, but it’s not contractual sick pay as it is authorised by the area manager on an individual basis.
I shall tell him that Ian. Thanks.
Thanks Ruth, but it’s not contractual sick pay as it is authorised by the area manager on an individual basis.
So he’s not paying tax and NI on it?
Thanks Ruth, but it’s not contractual sick pay as it is authorised by the area manager on an individual basis.
So he’s not paying tax and NI on it?
Hello,
It’s just normal pay so yes he pays his tax/NI and normal deductions on it.
hi
if he is paying tax and NO on it, it will be classed as earned income
As has been said, whether it is a ‘voluntary payment’ as you describe it or contractual sick pay is irrelevant for the purposes of the SSP1.
But if it is not contractual sick pay, it does sound like a very odd arrangement to me. Why would someone have tax and NI deducted by the employer in respect of a payment that can properly be said to be ‘voluntary’? And if it is not contractual sick pay, it might be worth finding out exactly what it is - it could be a payout from some form of permanent health insurance policy arranged by the employer. And if it is that, then it can affect the level of entitlement to C-ESA/NS-ESA.
hi
if he is paying tax and NO on it, it will be classed as earned income
This doesn’t really matter for the purposes of C-ESA/NS-ESA - for these, “earnings” does not include sick pay and for the purposes of ‘exempt’ or ‘permitted’ work, there must be some actual work and the payments must be in respect of that work. So a person whose contractual sick pay is well above the permitted work limit is not caught by any of this - the person is not working.
..’?And if it is not contractual sick pay, it might be worth finding out exactly what it is - it could be a payout from some form of permanent health insurance policy arranged by the employer. And if it is that, then it can affect the level of entitlement to C-ESA/NS-ESA.
Even if it’s from a PHI policy surely if claimant is still employed it doesn’t matter. Only becomes a potential issue if paid from a policy paid for by employer if employment ends.
I think my use of the word “voluntary” is causing issues. I just mean not compulsory or out of the goodness of their heart. Some employers do have hearts, but they do cause confusion when benefits rules are involved.
It is at the discretion of the client’s management how long any company sick pay is paid. There will not be an insurance policy paying out. so as far as the client is concerned he is just continuing to be paid his normal wage.
There is nothing income related anywhere.
I shall advise the client he should be issued with an SSP1 and take it from there.
Even if it’s from a PHI policy surely if claimant is still employed it doesn’t matter. Only becomes a potential issue if paid from a policy paid for by employer if employment ends.
Yes - absolutely. However, if the payment that the claimant is receiving from the employer is not actually sick pay (and there was previously some doubt/confusion about that in this case) then that might raise a reasonable question as to whether the employment had ended or not.
I think my use of the word “voluntary” is causing issues. I just mean not compulsory or out of the goodness of their heart. Some employers do have hearts, but they do cause confusion when benefits rules are involved.
It is at the discretion of the client’s management how long any company sick pay is paid. There will not be an insurance policy paying out. so as far as the client is concerned he is just continuing to be paid his normal wage.
There is nothing income related anywhere.I shall advise the client he should be issued with an SSP1 and take it from there.
Yes - it’s always best to be precise. Contractual sick pay is, of course, “discretionary” in the sense that no employer is bound by statute to have a contractual sick pay scheme or, where it decides to have such a scheme, how much of normal pay this might be and for how long it is paid. But any scheme does have to operate fairly and treat employees equally.
...it’s not contractual sick pay as it is authorised by the area manager on an individual basis.
suggests something falling some way short of that. I’d question how much of a “heart” an employer might have where this is how they run a scheme (some people get paid sick pay and others don’t? regardless of length of service? some get it for longer than others? and all because the local management decides these things on an individual basis?) - and that’s aside from the massive world of pain such arrangements might open up in employment law…...