Tax relief to help companies manage sickness absence
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Businesses will benefit from tax relief when they pay to help their employees return to the workplace after sickness.
Businesses will benefit from tax relief when they pay to help their employees return to the workplace after sickness, it was announced in the Budget last week.
Employers will receive tax relief on expenditure up to £500 on health treatment recommended by a new health and work assessment and advisory service to support employees to return to work after a period of sick absence.
This targeted tax relief will encourage employers to fund around 110,000 health-related interventions. Without this tax relief the payments would be liable to income tax and employer National Insurance contributions.
The new health and work assessment and advisory service will provide occupational health expertise to many small businesses for the first time.
The Minister for Welfare Reform Lord Freud said:
Over 130 million working days are lost to sickness absence and we need to stop people falling out of work and onto long-term sickness benefits.
The longer someone is out of the workplace, the harder it is for them to move back into work, but often fast intervention can stop people moving down that road.
The introduction of tax relief for interventions and the heath assessment and advisory service will help British business to hold on to their staff, help workers stay in work and cut the sickness benefit bill by up to £60million per year.
The Government will consult on the details of the tax relief later this year ahead of introduction with the service in 2014.
Funding for the new health and work assessment and advisory will be recycled from the Percentage Threshold Scheme (PTS) which will end in April 2014.
The new service was announced in the Government response to the independent review of sickness absence and will provide occupational health advice to employees, employers and GPs on the support and interventions needed to help employees move from sickness absence back into the workplace.
Notes to editors
The new health and work assessment and advisory service will:
- cut the sickness benefit bill by £30million - £60million per year
- cut sick pay costs to business by £80million - £165million a year
- increase economic output by £450million - £900million a year
- cost around £40 million a year
- be used by around 500,000 employees
The new service will provide an occupational health assessment after four weeks of sickness absence.
Following the assessment, the service will ensure individuals receive the most appropriate interventions, case management and follow-up support.
In addition, the service will provide an advice service for employers, employees and GPs throughout the process.
The establishment of a health and work assessment and advisory service follows the recommendations of the independent review of sickness absence led by Dame Carol Black and David Frost CBE.
The independent review and the Government’s response are available at: