This means that every £1 spent on rehabilitation to support the long term sick and disabled generates cost benefits totalling £16.80 for individuals, the tax payer, employers and insurers because people recover and return to work more quickly.
Rehabilitation support, a benefit provided through income protection, is often overlooked even though it can help people back to work sooner, with early intervention and treatment reducing the amount of time they need to take off and the likelihood of further relapses.
The £110m generated through rehabilitation support is made up of £74 million that directly benefits:
• individuals who are able to return to work and benefit from their original earnings - £5m gain
• the tax payer through higher tax revenues and lower welfare payments from the individual being back at work – £27m gain
• the employer through savings in occupational sick payments - £17m gain
• insurers – £25m saved through fewer income protection payments made which in turn reduces premiums for our customers
The research also highlights additional indirect savings that amount to around £35m which include the cost of temporary staff to cover absence, training and recruitment and lower productivity while an employee can’t work.
This amount however doesn’t include non-quantified benefits such as the reduced burden on the NHS from treatments being shorter or sourced privately, continued pension provision for employees off work or the impact on family who take on extra caring responsibilities.
The value of rehabilitation has been calculated by comparing treatment pathways for typical claims, considering the journey to recovery with and without the rehabilitation support available under a group income protection scheme. These financial gains have then been used to calculate the benefits for other stakeholders.
As well as looking at the financial benefits of rehabilitation through group income protection schemes, the study features five case studies to show how support has enabled a speedier return to work compared to somebody without cover.
Mental illness accounts for the largest number of claims and is estimated to cost the economy £70bn per year. The case studies highlight the importance of early intervention especially for longer-term conditions like depression and anxiety where effective treatment can significantly reduce the time taken for recovery and increase the likelihood of a successful return to work.
Gary Shaughnessy, CEO, Zurich UK Life said: “This study is part of Zurich’s ongoing commitment to raising awareness of the financial vulnerability of those unable to work through long term sickness and the role income protection can play in tackling this.
“With the UK’s workforce aging, we reiterate our call to encourage the Government to consider incentives for employers to improve take up. We believe group income protection needs to be at the heart of any UK welfare solution, which should be a partnership of public and private provision.
“Greater take up not only benefits individuals but provides considerable benefits to employers, the tax payer and the Government by relieving pressure on already stretched public funds and services.”
The study follows an earlier report from Kyla Malcolm for Zurich that examined the wider value of group income protection policies beyond rehabilitation support, and the benefits for individuals and the public purse.
To download the report ‘Income Protection and rehabilitation – working together’ please click on the document below
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