Uncategorized

Proposed income insurance scheme

By February 9, 2022 No Comments
AdobeStock_457630444_sm-b09edbf6

Proposed income insurance scheme

The only real highlight in the world of tax last week (although hardly a highlight and arguably not a tax), was the announcement by our esteemed finance Minister Grant Robertson, regarding the proposal to introduce a New Zealand income insurance scheme.

The scheme has been jointly designed by the Government, Business New Zealand and the New Zealand Council of Trade Unions. It would provide workers who had either been made redundant, laid off, or who have had to stop working because of a health condition or disability, with a payment equating to 80% of their usual salary for up to seven months. The proposal also includes up to 12 months of support for re-training.

Key features of the new scheme are:

  • Broad coverage for different working arrangements,
  • Coverage for job losses due to redundancy, layoffs and health conditions and disabilities,
  • A four-week notice period and four-week payment at 80% of salary, from employers,
  • A further six months of financial support from the scheme at 80% of wages or a salary.,
  • Option to extend support for up to 12 months for training and rehabilitation,
  • A case management service to support people’s return to work,
  • Administered by ACC,
  • Funded by levies on wages and salaries, with both workers and employers paying an estimated 1.39% each; and,
  • Workers eligible after six months of levy contributions in the previous 18 months.

If you would like to have your say on the new proposals, the closing date for submissions is 26th April 2022.

This article from the ‘A Week in Review’ newsletter was originally published Tuesday 8th February 2021. If you have any questions or would like a second opinion on any national or international tax issues, please contact me richard@gilshep.co.nz. 

If you would like to receive these updates directly to your mail inbox, you can subscribe by clicking here.