NZIIS The scheme will be managed by ACC, which will also collect the levy
Publicly provided income insurance is a new concept for New Zealand, but we do have a similar system for accidents: ACC. We propose that the New Zealand Income Insurance Scheme is funded and managed in a similar way.
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We’ll build on ACC’s experience by having it run the New Zealand Income Insurance Scheme too
Governance of the scheme will include Business New Zealand, New Zealand Council of Trade Unions and Māori representation.
Any scheme with defined rules will have disputes, but we expect these to occur in only a small number of cases. The scheme will have an independent dispute resolution process.
We want a scheme that honours the Treaty partnership
We seek te ao Māori perspectives to inform the design, development and operation of the proposed scheme, to ensure it applies the principles of kāwanatanga (governance), tino rangatiratanga (independence) and rite tahi (equity of rights).
The way the scheme is governed, delivered and evaluated should recognise a partnership approach, ensuring Māori have real authority to develop and implement policies that address Māori needs and respect te ao Māori.
This can be achieved through governance representation (including on the ACC Board and/or an advisory group to the Board); kaupapa Māori approaches to research, service delivery and evaluation; and seeking the perspectives of Māori claimants about service delivery.
Our scheme will be funded through levies on workers and employers
The scheme will be funded by levies on wages and salaries, with both workers and employers paying an estimated 1.39% each. These are estimates and will be reviewed after two years. They may need to be adjusted from time to time, depending on the number of claims and how long people receive financial support. This is the same way ACC levies work.
Everyone’s situation will be different, reflecting their circumstances. The following are examples for people who work 40 hours per week, and experience complete loss of work. Figures are before any tax deductions. Workers’ insurance levies will be also matched by employer contributions.
Earns $880 a week
Pays $12.23 per week in levies
Receives $704 a week in insurance payments.
Earns $1160 a week
Pays $16.12 a week in levies
Receives $928 per week in insurance payments.
Earns $2000 per week
Pays $27.80 a week in levies
Receives $1600 per week in insurance payments.
Daiyu is a manager for a local florist. An economic downturn, combined with changing demographics in the area, have led her boss to call time on the business.
Jobs are scarce, and Daiyu may have taken the first available retail position. But with insurance payments, she takes the time to study e-commerce and tries her hand at establishing an online flower store. She partners with another start-up – a delivery services using e-bikes to deliver goods – to offer two-hour deliveries. The online store fills an important gap in the market and becomes a hit, eventually expanding to other New Zealand cities.
Michael has built up his mechanic business over 30 years. His employees are like family.
In the past few years, business has been declining, and Michael thinks he knows why: a new train line has connected the suburb to the city and fewer people are driving. Electric vehicles sales are also up, but they need less maintenance, and Michael’s business isn’t equipped to repair them. Michael makes the devastating decision to lay some of his staff off, but he’s reassured to know they’ll be supported by insurance payments, and will have the time to find new work, or improve their skills to work on electric vehicles.
Our questions for you
The scheme would be funded by levies on wages and salaries, with both workers and employers paying an estimated 1.39% each. Do you think the levies are good value for the protection and benefits the scheme would introduce for you and for New Zealand?
How affordable do you think the levy will be for you?
How can we ensure the proposed income insurance scheme honours the Treaty partnership?
We propose that ACC delivers the scheme. Do you have any suggestions that will be important to consider for ACC’s delivery of the scheme alongside the existing accident compensation scheme?
Now that you have read about different aspects of our proposed New Zealand Income Insurance Scheme, what do you think overall? Do you think New Zealand needs the scheme, taking into account what employers and employees will need to pay? What do you see as the strengths and weaknesses of the scheme?
Have your say options
You can either:
Answer questions in a short survey
Complete the survey(external link)
Provide a detailed submission through the Have Your Say section of our website
Have Your Say | NZIIS consultation(external link)
Submissions close 26 April 2022.