NZIIS Financial support is provided for most jobs losses
Our scheme is designed to provide enough of a financial cushion that workers have the time and financial security to find a good new job, rehabilitate, or retrain for a different career.
This also benefits employers as it contributes to New Zealand becoming a higher productivity economy where businesses generate more value and greater returns. It helps maintain consumer spending through economic shocks, and keeps people connected to their employers.
Our scheme will see workers receive 80% of their usual salary – capped at salaries of $130,911 a year – for up to seven months, if they lose their job. Workers aren’t covered if they’re dismissed for poor performance or misconduct, or they quit their job.
These payments aren’t affected if someone has assets (such as property they own), or if they receive money from other sources (such as government support), or if others in their house (like their partner) continue earning.
Employers will give notice and four weeks’ pay if they lay off workers or make them redundant
All permanent employees will get four weeks’ notice, and their employer will continue to pay wages for four weeks at 80% when the job ends, after which income insurance payments would begin. These payments are in addition to any other redundancy provisions in an employment agreement.
The payment encourages employers to consider if redundancy is necessary, or if alternatives can be found. It will also discourage fraudulent claims. Employers could seek a refund of some or all of the payment if they assist the worker to find work within the initial four-week period. This payment also reduces costs for all employers and employees, supports good employers, and makes sure that the costs of redundancy are more fairly shared.
In the event a business fails and the business can’t pay, the scheme will cover this payment and seek to recover this from liquidators.
Employers will need to provide this notice period and payment if they end someone’s employment because a health condition or disability means the employee can no longer do their work. This encourages employers to make reasonable attempts to accommodate the employee’s health condition or disability, through things like new equipment or flexible working arrangements. These obligations don’t apply if a worker quits for health reasons.
Workers made redundant or laid off for economic reasons will receive up to six months of financial support from the scheme
To qualify, the job must end. A reduction in hours worked at the job is not an event that is covered by the scheme.
After four weeks, if a worker hasn’t yet found work, the scheme will provide them with 80% of their usual income for up to six months, to give them the financial security to find a good job that matches their skills, experience and aspirations. If they lost their only job, they’ll receive the full 80%, but if they have other jobs, their income will be topped up to 80% of what they were earning across all their jobs.
People can only receive six months of insurance payments every 18 months. This can be spread over multiple claims (using any unused financial support), and the 18 months begins from the first claim.
Workers with health conditions or disabilities will receive the same amount of insurance cover
To be eligible, someone must stop working entirely or experience a reduction in their capacity to work by at least 50%. The health condition or disability must be expected to last for at least four weeks. Any health issues shorter than this should be addressed with sick leave and other leave options.
Employers will be encouraged to make reasonable efforts to hold the position open if the worker is likely to recover within six months. Doctors will certify a person’s capacity to work and, where appropriate, employers will provide supporting information.
The scheme will pay workers 80% of their salary for up to six months. If they can remain in part-time work with the employer, the scheme will top them up to 80% of their usual salary.
Our questions for you
What do you think about our proposals for up to six months of support from the scheme, at 80% of someone’s normal salary? Higher levels or longer durations of financial support will mean the levies paid by employers and employees will be higher.
Employers will provide a four-week payment for redundancies and layoffs, to discourage unnecessary redundancies and provide extra assurance that the scheme is only used by those who should be eligible, lowering costs to other employers. What do you think about this payment? Are there other ways to promote integrity?
If you’re a worker, and you lose your job, how do you think you would use the financial support you would get through this scheme?