John Letizia, head of public affairs at Unum, says the Treasury’s ‘door is open’ to legislative changes to boost income protection, especially through an auto-enrolment push for group protection in the workplace.
In the latest FTAdviser video interview, Mr Letizia said he was in talks with government about increasing the take-up of group income protection and reducing the burden on the state of absence from work.
He told FTAdviser’s Emma Ann Hughes that while the Treasury was open to ideas it was not currently the right time in the political cycle to push for automatic enrolment for GIP, or his preferred option of tax incentives to employers offering this benefit.
Mr Letizia said of the option of offering a tax break for protection take-up via employers: “The Exchequor does not lose any money, the employer has a bit of cashback that they can invest in providing a benefit and ultimately the employees will benefit.”
He also said it could boost the economy more generally as if covered employees need rehabilitation in order to get back into work “then they can access that straight away”.
His comments come after last week Nick Homer, group protection manager of Zurich UK Life, said he was also open to discussions around automatic enrolment for group income protection but would similarly rather see tax advantages for employers who offer the benefit.
It also comes after the Association of British Insurers revealed it is in discussions with the government on welfare reforms to boost protection - and in the wake of a report today (13 February) by the association with claimed the government stands to save up to £300m.
Mr Letizia added: “I don’t think they (the government) want to do anything right now but I think the door is open. It is up to the industry to start thinking what will be the best way. We need to come up with proposals.
“If we get some sort of help from government, primarily on the tax issue, then I think that ultimately will be much more beneficial than telling the government to give us automatic enrolment.”