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Income Insurance Scheme

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 to better protect 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. 

People with a health condition or disability, which meant they needed to stop working or reduce their hours, will be supported to take time off work to recover fully, or work reduced hours, or retrain if they could not continue to work in their existing job. 

Like ACC for accidents, the scheme will 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, 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 would become eligible after six months of levy contributions in the previous 18 months.

The scheme is now open for public comment, with submissions closing on April 26. 

Read the announcement by the Finance Minister, Business New Zealand CEO and New Zealand Council of Trade Unions President.

Please send feedback to by 18 April 2022.

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