Effective Dates: 11/20/2023 - Present Previous | Next

TN 89 (11-23)

SI 00820.005 Sick Pay

CITATIONS:

Social Security Act, Section 1612;
20 CFR 416.1110 and 404.1051

A. Definition of sick pay

Sick pay is a payment made to or on behalf of an employee by an employer or a private third party (such as a union or an insurance company) for sickness or accident disability.

B. Policy

1. Sick payments (except annual/sick leave)

Sick pay is either wages or unearned income. (Payments to an employee under a workers' compensation law are neither wages nor sick pay.)

The following chart shows how to treat sick pay received since January 1, 1982. For sick pay received prior to January 1, 1982, see RS 01402.090.

WHEN RECEIVED ATTRIBUTABLE TO

EMPLOYEE'S OWN

CONTRIBUTION? 		TYPE OF

INCOME

More than 6 full calendar months after stopping work

N/A

Unearned Income

Within 6 full calendar months after stopping work

No

Wages

Within 6 full calendar months after stopping work

Yes

Unearned Income

NOTE: When sick pay is alleged within 6 full calendar months after stopping work, it must be determined whether or not the employee contributed by payroll deduction toward a sick pay plan by reviewing the pay slips or contact with the employer. Any sick payment, or portion thereof, received by an employee during the first 6 full calendar months after stopping work, which, according to the employer, are attributable to the employee's own contribution, is not wages.

EXAMPLE: John is still within 6 months of stopping work and receives sick pay of $400 per month. John's employer advises that 40% of sick pay is attributable to John's own contribution. John should be charged with $240 earned income ($400 x 60%) and $160 unearned income ($400 x 40%).

2. Annual and sick leave payments

Annual and sick leave payments are considered a continuation of salary. Annual and sick leave that is donated to an individual is treated the same as if it were the individual's own leave. That is, the gross wages are counted as income to the individual. No additional income results from the donated leave.

C. Procedure

1. Development

To determine the 6-month period after stopping work:

  • •

    Begin with the first day of non-work;

  • •

    Include the remainder of the calendar month in which work stops; and

  • •

    Include the next 6 full calendar months.

EXAMPLE: If an individual stops work on May 5, the 6-month period begins on May 6 and runs through November 30.

2. Verification

  1. a. 

    General

    Verify sick pay which is wages by using the wage verification procedure in SI 00820.135 or SI 00820.140.

  2. b. 

    Last Day (or Month) Worked

    Verify the last day (or month) worked with the employer or knowledgeable third party.

3. Documentation

Document the EVID screen or a Report of Contact with information extracted from the employer/third party's statement showing the last day (or month) worked.

D. References

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0500820005
SI 00820.005 - Sick Pay - 11/20/2023
Batch run: 11/20/2023
Rev:11/20/2023