The obvious trigger is an employee returning from, or remaining on, sickness absence where you need to confirm in writing what they will be paid. A verbal "yes, you'll get sick pay" is the seed of most later complaints, because the employee hears a guarantee and you meant something more conditional. Issue the letter as soon as the eligibility position is clear, ideally before the next payroll run so the figures on the payslip match the figures in the letter.
You also need it when you are saying no. Telling someone they do not qualify is harder than telling them they do, and doing it in a measured letter, with the reason and the route to other support, is far safer than a hurried message. Where the answer is no, the decision letter should be issued alongside the statutory SSP1 form, not instead of it, because the SSP1 is what lets the employee claim other benefits. A separate situation arises when an absence is long and you are confirming that the 28-week SSP maximum is approaching, which the employee needs to plan around. The harder edge cases are the ones that justify a careful template. An employee whose sickness absences fall within 56 days of each other forms a single linked period, so the entitlement clock does not reset, and a letter that treats each spell as fresh will overpay or underpay. The other classic is the disability-related absence, where a correct SSP calculation can still sit inside an unlawful pattern of treatment, and the letter should be drafted with that risk in mind rather than as a pure payroll note. If the absence is being managed alongside a formal process, align the wording with your UK dismissal letter that follows the ACAS Code so the two documents do not contradict each other.