Plans to abolish the refund scheme for Statutory Sick Pay will hit people who hire carers or support assistants to help them at home
The scheme was originally designed to support small employers faced with high levels of employee sickness.
The abolition of the SSP compensation scheme will be unfair on individuals who employ care and support assistants, according to the Low Incomes Tax Reform Group (LITRG).
The LITRG says the government has failed to understand how its proposals to abolish the sickness absence compensation scheme, and the new £2,000 National Insurance tax break, will impact older or disabled people who take on a personal assistant to help them with daily tasks at home.
From 6 April 2014, employers are no longer able to claim reimbursement for SSP, following the abolition of the Percentage Threshold Scheme (PTS).
Anthony Thomas, LITRG chairman said: ‘Our analysis shows that elderly or disabled people who use their own money or money from schemes set up to help them live independently to employ a personal assistant could be up to £2,500 a year out of pocket.
‘Since the announcement of the government’s plans we have been unable to find any justifications which warrant such a material financial change for many vulnerable people.’
Thomas said that the reasons for abolishing PTS, including a reduced administrative burden and helping employers better manage sickness absence, did not apply to people who are only classed as employers by virtue of hiring someone to care for them.
He also said they were unlikely to benefit from the new annual £500 tax exemption for any medical support an employer provides for an employee which has been introduced to replace the PTS,
‘Additionally, this announcement comes at a time when such employers have very surprisingly been specifically excluded from the new £2,000 employment allowance, which has been introduced from April 2014 to help small businesses and charities with their workforce costs,’ Thomas said .
The LITRG is calling for a complete rethink of the abolition of the PTS scheme for care and support employers, and also wants the government to look at extending eligibility for the £2,000 employer allowance for this group.
Thomas said: ‘It would be extremely unfair if this category of particularly vulnerable employers were made to suffer twice.’
