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Call for 'back to work' tax incentives. By Dan Martin

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15th Oct 2006
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The government should introduce back to work tax incentives to encourage employers to act sooner to prevent long term illness among their workforce, a new report demands.

Norwich Union Healthcare said although work absence due to illness costs the economy £13.2bn a year, the current incentives for employers are weak.

The report said failures have been caused because no one stakeholder has an over-riding incentive to invest in early intervention, while the market for workplace health rehabilitation programmes is weak due to low demand and a lack of innovation in product design.

Although employers are well placed to provide workplace interventions, it added, investment levels remain low because firms employers bear only part of the cost of absence, with society bearing the majority. Employers miss out on between £398m and £430m, while society losses £4.3bn to society, the study claimed.

The report called for fiscal incentives such as match funding or tax credits to overcome the losses caused by sick pay, overtime and replacement labour.

Tim Baker, commercial director, Norwich Union Healthcare said: "The report seeks to stimulate the debate on the role of tax incentives in encouraging employers to engage with workplace health and rehabilitation services.

"It shows how the market is failing at the moment but how, with a change in relationship between the stakeholders, we could begin to tackle the problem of sickness and absence in the workplace."

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