NZIIS Most workers will be covered by income insurance
Our proposed scheme aims to cover as many workers as possible to reflect the different ways people work, ensure more people can benefit and to keep costs low.
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People working in New Zealand will pay insurance levies to support them if they lose their job.
To be eligible, people will need to have worked or been on statutory parental leave for at least six months in the past 18 months. New Zealand citizens and residents will be eligible for insurance payments.
We’ve developed different eligibility criteria for people who stop working because of a health condition or disability, and those who are made redundant or laid off.
Coverage for employees made redundant or laid off
Insurance is about covering unexpected risks outside of one’s control, so our coverage for redundancy and layoffs reflects this. We’ve taken care to cover as many people as possible who have a pattern of regular, ongoing work, while excluding or limiting coverage for people who have much greater control of when and how they work.
Non-standard employment arrangements will have additional criteria for access to the scheme:
- Fixed-term and seasonal workers are eligible, but generally only up to the original intended end date of the job: for example, if someone loses their job four months before it was due to finish, they’ll be supported by the scheme for a maximum of four months.
- Fixed-term and casual workers who can show a regular pattern of work with an employer, and a reasonable expectation of future income, will be treated like permanent workers and eligible for the full support offered if their regular pattern of work is disrupted.
- People working multiple jobs are eligible if they lose a job that provides more than 20% of their income. Any payments will top up these workers to 80% of their previous income.
Coverage for loss of work due to a health condition or disability
Most workers will be covered for health-related job losses, including part-time, fixed-term, seasonal and most casual employees, as well as contractors and the self-employed. This recognises that health conditions and disabilities are something people generally can’t control.
It will help address the current disparity where a person who experiences an accident can receive much more support than a person with a non-accident-related health condition or disability, such as being diagnosed with cancer, despite a similar loss of ability to work.
Coverage for contractors and the self-employed who lose work
We’re seeking your views on coverage for self-employed people. Ideally, we want the scheme to cover self-employed workers who most resemble employees, such as those with a small number of clients.
The self-employed are a diverse group. Some depend on a few contracts (such as ridesharing, courier drivers or construction subcontractors), while others (like independent tradespeople) work for many clients. We want to protect people who genuinely lose work for reasons beyond their control, while not covering people who may choose to close their work down in order to access the scheme.
Broad eligibility means Māori, Pacific peoples and women benefit
We want the scheme to reflect the different ways population groups work and meet the obligations under Te Tiriti o Waitangi. We know Māori, Pacific peoples and women are more likely to have non-standard working arrangements. Women make up 62% of people with multiple jobs and 75% of those working part time, 32% of seasonal workers are Māori; and 10% of Pacific peoples work in casual jobs. By designing a scheme that covers as many people as possible, we’re helping to establish a scheme that is fair and equitable.
Hemi is a mobile crane operator who has three different jobs working for oil and gas companies.
One company, which provides 50% of Hemi’s usual income, decides it no longer needs his services, and makes him redundant. He’s eligible for insurance payments to top up his take-home pay back to 80% of normal. He uses his spare time and the financial security these payments provide to begin looking at other sectors. After four months, he has a new job installing wind turbines, and his insurance payments end.
Natalie is an experienced airline pilot, flying Kiwis around the country and the world for 15 years.
Her career outlook looks promising, until a pandemic strikes: borders are closed, travel bookings plummet, and Natalie is made redundant. Flying a plane involves more than handling the wheel, it requires an eye for detail, critical thinking, communication, data literacy and leadership. Natalie uses her insurance payments to take stock of her career and look for a new path. After four months, she finds a job that matches her skills: operations manager at a recycling plant.
Our questions for you
Many types of working arrangements exist, including permanent, fixed-term and casual employees, as well as contractors and self-employed people. What do you think about our proposals to cover a broad range of working arrangements?
What do you think about our requirements for workers to be eligible for payments? For example, having paid levies, being a New Zealand citizen or resident, and different coverage for health and disability-related job losses.