The Statutory Sick Pay Percentage Threshold Scheme is not linked to finding work, rather it compensates employers with high levels of sickness absence. An independent review of sickness absence¹ found that this scheme does nothing to tackle the causes of absence. As a result, the Government accepted a recommendation in the review to abolish the Percentage Threshold Scheme. The Government also accepted a recommendation to establish a service (now known as the Health and Work Service) to offer specialist occupational health assessment and advice to employers, employees and GPs. The service is designed to reduce the costs of sickness absence for employers by addressing the issues preventing a return to work, and supporting employees back to work as quickly as appropriate.

We consider that the creation of the Health and Work Service, funded by the abolition of the Percentage Threshold Scheme, will enable sickness absence to be better managed and improve the employment prospects of all employees, including older and disabled workers.¹ Black, C. and Frost, D (2011) Health at work-and independent review of sickness absence.

The SSP Percentage Threshold Scheme compensates employers with high levels of sickness absence but an independent review of sickness absence¹ found it does nothing to tackle the causes of absence. As a result, the Government accepted a recommendation in the review to abolish the Percentage Threshold Scheme. The Government also accepted a recommendation to establish a service (now known as the Health and Work Service) to offer specialist occupational health assessment and advice to employers, employees and GPs. The service

is designed to reduce the costs of sickness absence for employers by addressing the obstacles preventing a return to work, and supporting employees back to work as quickly as appropriate. It will be funded from the savings made from the abolition of the PTS and will provide a more proactive way to manage sickness absence.

Small businesses are least likely to have access to occupational health services, and will benefit from having access to occupational health assessments and advice through the HWS.¹ Black, C. and Frost, D (2011) “Health at work—and independent review of sickness absence”.

The Government believes that reinvesting savings from the abolition of the Percentage Threshold Scheme to establish the Health and Work Service is the most effective means of targeting public funds to tackle sickness absence. The Health and Work Service will reduce the length of sickness absence and offers a more proactive approach to sickness absence management. Small businesses are least likely to have access to occupational health services, and will benefit from having access to occupational health assessments and advice through the Health and Work Service.

We have considered an alternative approach along the lines of restricting access to a reimbursement scheme to employers with fewer than five employees. However, this was discounted because it resulted in additional burdens on employers and additional statutory sick pay reimbursement costs for the state.

The Department for Work and Pensions has published an impact assessment outlining the abolition of the Percentage Threshold Scheme (PTS) and introduction of the new provision of health assessments and occupational health advice available at the following link:

http://www.legislation.gov.uk/ukdsi/2014/9780111108468/impacts

There are no specific exceptions in place for women in this position. During any period that a woman is in receipt of statutory sick pay, for whatever reason, she is entitled to be credited with earnings equal to the lower earnings limit. These credits can be applied where the actual earnings for a particular year are insufficient to satisfy the contribution conditions for jobseeker’s allowance.

An informal consultation on the income tax exemption for health-related interventions recommended by the Health and Work Service (HWS) ran from 21 June to 16 August 2013. The consultation document was published on the GOV.UK website.¹ Government officials also met with external stakeholders on 30 August. The Government is currently considering the consultation responses and will set out further details at autumn statement.

“Implementation of a tax exemption for employer expenditure on health-related interventions recommended by the new health and work assessment and advisory service”

https://www.gov.uk/government/consultations/implementation-of-a-tax-exemption-for-employer-expenditure-on-health-related-interventions-recommended-by-the-new-health-and-work-assessment-and-advis

I have been asked to reply on behalf of the Department for Work and Pensions.

The information requested is as follows:

(a) As announced at Budget 13, the Government will introduce targeted tax relief. Amounts up to £500, paid by employers on health-related interventions recommended by the service, will not be treated as a taxable benefit in kind. The Government will consult on implementation later in 2013.

(b) We are currently in the early stages of designing the new health and work assessment and advisory service. We expect the service to be delivered through external provision and an

invitation to tender to this effect will be issued in due course. Funding for the new service will be recycled from the Percentage Threshold Scheme (PTS) which will end in April 2014.