The Association of British Insurers is urging the Treasury to offer tax incentives to encourage small businesses to provide well-being and rehabilitation packages to employees.
Head of health and protection Nick Kirwan says many big companies offer programmes to keep their employees healthy and get them back to work after an illness but very few small businesses provide this.
He says: “A tax break would make this financially viable for everyone. The employee’s quality of life improves when they go back to work, the Government will pay out less in incapacity benefits and the insurers will sell more products. However, in the short term, the employee may be less productive so the tax break can fill that economic gap for the company.”
Over two-and-a-half million people claim incapacity benefit, costing the state £12.6bn each year.
Before Christmas, the Government announced plans to reduce the number of people claiming incapacity benefit through more stringent tests to assess claimants’ ability to work. The Tories set out similar plans in January.