The introduction of the Government’s flagship Income Insurance scheme has been delayed by one year to 2024. The announcement formed part of Grant Robertson‘s (pictured) Budget speech on 19 May.
If implemented, the scheme would provide workers without a job, due to sickness or redundancy, with 80% of their wages or salary for six months. Funding the scheme would come from additional taxes of 1.39% on employers and employees.
Consultation on the proposed scheme closed on 23 April and among those with more questions than answers is Financial Advice NZ CEO Katrina Shanks. She says some in the insurance sector are concerned the scheme will be compulsory, with no opt-in/opt-out option – unlike state-supported pension scheme KiwiSaver.
FSC CEO Richard Klipin has also raised concerns about the speed of the scheme’s progress through Parliament – saying the “…significant scope of the proposal relative to the lack of prior industry engagement and a consultation period…is of significant concern”.
[See our story FSC Critical of Income Insurance Scheme Process]
During his speech Robertson repeated that $60 million has been set aside to help implement the scheme – which is being formulated with input from BusinessNZ and the Council of Trade Unions.
“There is considerable work to get the scheme up and running and it is now expected that it will be operational in 2024,” said Robertson.
Do you support the Government's plan to introduce a state-backed income insurance scheme?
- No (80%)
- Yes (11%)
- Not sure (9%)
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