Government Income Insurance Scheme Would Create ‘Two-Tiered Welfare System’ – Anti-Poverty Campaigners

Poverty free campaigners, organising under the banner ‘Care for All’, are opposed to the Government’s proposed income insurance policy as it excludes many in need.

“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 and member of Care for All. “As the public recognises, we urgently need more support for all through the welfare system. But instead, the Government is fast-tracking a massive scheme that only helps those who have been in paid work.”

The proposed New Zealand Income Insurance Schemewould provide 80% of a person’s wages or salary for up to six months after redundancy, or employment-debilitating health conditions or disabilities. It would be funded by employees and employers each paying a 1.39% levy (around $11 a week for someone on a fulltime minimum wage), administered by ACC. People who are not eligible for the scheme include those for whom paid employment is impossible or inappropriate – including permanently disabled people and many caregivers – as well as those unofficially bullied out of jobs, and many self-employed people.

“We agree those who lose paid work need a robust support system – but income 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 whānau, not just a few,” said Stanley Pao, “Bringing in a contribution-based system will exclude and divide, and introduce users-pays to social welfare.”

Women are far more likely than men to be excluded due to more women being out of the workforce caring for children and other family members.

Care for All is encouraging people to express their opposition to the Income Insurance Scheme before public consultation closes on 26 April 2022. More information can be found at twotierwelfare.org.nz