Campaign takes stand against NZ income insurance scheme

Campaigners opposed to the government’s proposed income insurance scheme have organised under the banner, “Care for All”, arguing that the scheme excludes many in need while failing to address major long-term concerns in New Zealand such as poverty, housing, and inflation.

“Compulsory income insurance creates a two-tiered welfare system, and many people will miss out,” said Brooke Stanley Pao, coordinator of Auckland Action Against Poverty (AAAP), a political organisation and member of Care for All. “As the public recognises, we urgently need more support for all through the welfare system. [Instead], the government is fast-tracking a massive scheme that only helps those who have been in paid work.”

The proposed scheme would provide 80% of a person’s wages or salary for up to seven months after notice of redundancy, layoff, or job loss due to health condition or disability. It would be funded by employees and employers each paying a 1.39% levy.

This translates to around $11 a week for someone on a full-time minimum wage, the campaign points out, which many low-paid workers would find unaffordable.

Those for whom paid employment is impossible or inappropriate – including permanently disabled people, those unofficially bullied out of jobs, and many caregivers and self-employed people – would not be eligible for the scheme, Scoop reported. Women were also far likelier to be excluded than men due to more women being out of the workforce caring for other family members.

Care for All campaigners agree those who lose paid work need a robust support system but insist “insurance is not the answer”.

“It does not provide support-based on need; it provides support based on prior employment income. We need liveable incomes for all whanau – not just a few,” Stanley Pao said. “Bringing in a contribution-based system will exclude and divide and introduce [user]-pays to social welfare.”

Care for All is encouraging people to express their opposition to the income insurance scheme before public consultation closes on 26 April.