Every year, more than 100,000 New Zealanders are made redundant and laid off, or have to stop working because of a health condition or disability.

Few protections are available for people who lose their job. Some receive redundancy payments, though these are rarely paid if a business fails. Some people are eligible for welfare support, but not all.

The Government, Business New Zealand and the New Zealand Council of Trade Unions are proposing a new way of better protecting workers and the economy: a New Zealand Income Insurance scheme.

It will support workers with 80 percent of their income for up to seven months if they lose their job through no fault of their own. Under the proposed scheme, people will have the time and financial security to find a good job that matches their skills, needs and aspirations, or retrain for a new career.

The Government, Business New Zealand and the New Zealand Council of Trade Unions are keen to hear from education providers and professionals and students on their views on the proposals.

The income shock of a job loss is significant, and people frequently have to take the first job they find, which is often lower-paid and can lead to lower life-time earnings. Supporting people with financial security and time to study and retrain in new industries with better opportunities also contributes to improved business productivity.

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.

Read more about the proposals, complete a short survey or make a submission.