The Chancellor, Rishi Sunak, opened his first Budget with a series of ‘temporary, timely and targeted’ measures to support employees and employers affected by the coronavirus (COVID-19).

This note covers the changes announced on 11 March 2020 in respect of statutory sick pay (SSP) and homeworking.

Statutory sick pay

As a quick reminder, SSP is a payment that employers are required to make, currently at a rate of £94.25 per week (£95.85 from 6 April 2020) for up to 28 weeks. To qualify for SSP, the individual must be classified as an employee who has done some work for their employer, the employee must be sick for at least four days in a row (including non-working days) and earn at least an average of £118 per week. SSP is a cost to the employer.

For the full SSP qualifying conditions, see the Statutory sick pay (SSP) guidance note.

Following the Spring Budget 2020, SSP rules are to be changed temporarily to help workers affected by the COVID-19 outbreak.

The Chancellor confirmed the Prime Minister’s previous announcement that SSP will be paid from day 1, rather than day 4 before announcing the following new measures.

To support the above change, the Government will extend on a temporary basis SSP to cover individuals who are unable to work because they have been advised to self-isolate, and people caring for those within the same household who display coronavirus symptoms and have been told to self-isolate.

In addition, to take pressure away from GPs, self-isolating employees will be able to obtain a notification via NHS111 which they can use as evidence for absence from work.

See Budget Report 2020 , pp 38–39 ((web) paras 1.94 and 1.95).

Self-employed individuals and employees below the lower earnings limit who are not eligible for SSP can now more easily make a claim for universal credit or contributory employment and support allowance:

  • for the duration of the outbreak, the requirements of the Universal Credit Minimum Income Floor will be temporarily relaxed for those who have COVID-19 or are self-isolating according to government advice, ensuring self-employed claimants will receive support
  • people will be able to claim universal credit and access advance payments upfront without the current requirement to attend a jobcentre if they are advised to self-isolate
  • contributory employment and support allowance will be payable, at a rate of £73.10 a week if the individual is over 25, for eligible people affected by COVID-19 or self-isolating in line with advice from day 1 of sickness, rather than day 8

See Budget Report 2020 , p 39 ((web) para 1.96).

See the Statutory sick pay (SSP) guidance note for further information generally on SSP.

Repayment of SSP

In addition, to help insulate businesses against the impact of COVID-19, small and medium-sized businesses (with less than 250 employees) will have the costs of SSP for any employee off work because of COVID-19 for up to 14 days refunded by the Government in full.

The full eligibility criteria for the scheme will be as follows:*this refund will cover up to two weeks’ SSP per eligible employee who has been off work because of COVID-19:

  • employers with fewer than 250 employees will be eligible ― the size of an employer will be determined by the number of people they employed as of 28 February 2020
  • employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
  • employers should maintain records of staff absences, but employees will not need to provide a GP fit note
  • eligible period for the scheme will commence the day after the regulations on the extension of SSP to self-isolators come into force
  • while existing systems are not designed to facilitate employer refunds for SSP, the Government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.

The exact legislative and / or other mechanisms whereby these changes are to be introduced are not yet known to us. We will report further when more information becomes available.

See Budget Report 2020 , pp 39–40 ((web) para 1.99).


Currently, employers may make contributions towards an employee’s home expenses under ITEPA 2003, s 316A. Amounts can be paid in respect of the reasonable additional costs that an employee incurs. This exemption only applies to amounts reimbursed by the employer and not to costs borne by the employee.

In order for the exemption to apply, there must be ‘homeworking arrangements’ in place (see the Homeworking guidance note for the meaning of ‘homeworking arrangements’).

The exemption is designed to cover the additional costs of things such as increased heating, lighting or electricity costs. It does not cover expenses which the employee incurred in order to allow him to work at home. For example, mortgage interest payments, building alterations or the cost of additional equipment which the employee has to provide to work at home.

The employer may choose to reimburse the full amount of the employee’s extra costs. In which case, the employee and the employer must keep records to substantiate the reimbursement. This may prove difficult as the increased amount needs to be proven.

Alternatively, the employer may choose to reimburse based on HMRC-approved scale rates without the employer having to justify the amount paid. For tax years from 2012/13 onwards, these amounts are £4 per week or £18 per month.

The Government announced that from April 2020, it will increase the tax and NIC exempt amount that can be paid towards the additional costs of working from home from £4 to £6 per week, where the employees work at home under ‘homeworking arrangements’ (see para 2.11 of OOTLAR ). As a result, employers will be able to pay eligible employees with an additional £2 per week to cover business costs when working from home.

Although this change was not included as part of the measures announced to support employees and employers affected by the coronavirus, we are now seeing more employees working from home or being asked to work from home as a result of the coronavirus outbreak. Employers need to think ahead and plan for the potential disruption of the coronavirus on their workforce. They may now see employees having trouble getting to their normal place of work, notably because of illness but also because of self-isolation and other unexpected events (such as closure of schools). Employers should assess their employees’ ability to work remotely, taking into consideration their IT setup and equipment at home, and review their ‘working from home’ policies if these are already in place.

For detailed technical commentary on ‘homeworking’, see the Homeworking guidance note.

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