Breaking: Unemployment and sickness insurance scheme proposed

Scheme would see laid off or long-term sick workers get 7 months pay at 80% of usual salary; 'NZ Income Insurance Scheme' would be run by ACC; Funded via levy of 1.39% each from workers & employers

TLDR: The Government has released details of its unemployment insurance proposal first flagged in last year’s Budget. It would see 2.78% of income taken as another ACC-style levy to pay for unemployment and sickness support for up to seven months, and for 12 months of retraining support.

Poverty activists argue the proposed scheme will further widen the gap in incomes between middle-class salaried workers and those on low or precarious incomes, especially already those who are unemployed long-term. Photo: Lynn Grieveson/TheKaka

The ACC-style scheme would be run by ACC and involve both employers and workers each paying a 1.39% of income levy enabling seven months pay at 80% of salary in the event of redundancy or long-term sickness or disability. People made redundant will also be able to keep claiming the dole or pension, plus accommodation supplements or student allowance, as well as the insurance receipts.

The Government, BusinessNZ and the CTU released the proposal at 10.30am, which now is open for submissions until April 26. At first glance, it appears more generous than expected with sickness and disability included, and it would massively expand the scale and operations of ACC.

Poverty activists oppose the scheme, arguing it will further widen the gap in incomes between middle-class salaried workers and those on low or precarious incomes, especially already those who are unemployed long-term.

I wrote about backgrounder about this when it was first flagged in the Budget last year. Paid subscribers can see more detail and initial analysis below the paywall fold.

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