The proposed New Zealand Income Insurance Scheme, jointly designed by the Government, Business New Zealand and the New Zealand Council of Trade Unions, aims to protect as many workers as possible from ‘no fault redundancy’.
Quick summary
- The scheme will be funded by levies on wages and salaries, with both workers and employers paying an estimated 1.39 per cent each
- Employees who are made redundant receive an income of 80% of their salary for up to 7 months
- A four-week notice period and four-week payment, at 80 percent of salary, from employers
- A further six months of financial support from the scheme, at 80 percent of wages or a salary
- Option to extend support for up to 12 months for training and rehabilitation
- Consultation open until 26 April, 2022
The scheme would see workers made redundant, laid off, or who have to stop working because of a health condition or disability, receive 80 percent of their usual salary for up to seven months, up to the current ACC cap. Employers and employees would need to pay a levy on income below a certain cap to fund the scheme. The Government says that this scheme would give people the time and financial security to find a good job that matches their skills, needs and aspirations, or take part in training or rehabilitation for a new, fulfilling career.
People whose ability to work has been impacted by a health condition or disability would also be supported to take the time off work to recover properly, work reduced hours, or retrain if they couldn’t continue in the same job.
Workers would be eligible after six months of levy contributions in the previous 18 months, with the scheme administered by ACC.
The Restaurant Association is seeking feedback from members on the proposed scheme, which will come at a cost for both employers and employees at a time when additional costs to business will be extremely challenging to absorb. Submissions are open until 26 April, 2022.