Government announces Income Insurance scheme consultation

The Government, Business New Zealand and the New Zealand Council of Trade Unions today announced proposals for a New Zealand Income Insurance scheme to help support New Zealanders who are made redundant and laid off, or have to stop working because of a health condition or disability.

The proposed scheme would support workers with 80 percent of their income for up to seven months if they lose their job through no fault of their own. Like ACC for accidents, the scheme would be funded by levies on wages and salaries, with both workers and employers contributing.

The key features of the proposed New Zealand Income Insurance Scheme are:

• Broad coverage for different working arrangements

• Coverage for job losses due to redundancy, layoffs and health conditions and disabilities

• A four-week notice period and four-week payment, at 80% of salary, from employers

• A further six months of financial support from the scheme, at 80% of wages or a salary

• Option to extend support for up to 12 months for training and rehabilitation

• A case management service to support people’s return to work

• Administered by ACC

• Funded by levies on wages and salaries, with both workers and employers paying an estimated 1.39% each

• Workers eligible after six months of levy contributions in the previous 18 months.

The Government, Business New Zealand and the New Zealand Council of Trade Unions are keen to hear from businesses, the self-employed and workers on their proposals.

For more information on the proposal, or to make a submission, see proposals released for a New Zealand Income Insurance Scheme (available on the Ministry of Business, Innovation & Employment's website).

Submissions close on 26 April 2022.

Source: IRD