NZ Income Insurance Scheme
Proposed NZ Income Insurance Scheme - by Craig Nolly
(Update February 2023) - The Government has deferred the NZ Income Insurance Scheme which will not proceed as proposed while NZ is facing serious economic challenges.
For many New Zealanders good quality income protection cover is out of their reach. Most relying on ACC in the event of an accident, and many leaving it to good luck, or the generosity of Facebook friends via a Givealittle page in the event of a severe illness.
Typically, those who purchase personal income cover have a lifestyle they wish to protect over and above that supported by the government safety net, being either the sickness or unemployment benefit.
Many lower income earners and those left without any disposable income at the end of each week, would have a little more security with the implementation of a Social Scheme with compulsory levies from wages or salaries to support them through a tough time. This scheme would give the individual a 7-month window where they can receive 80% of their income while they find another job, take part in training or possibly rehabilitation of some sort if they were to lose their job through no fault of their own.
As a professional adviser with 34 years’ experience in exactly this field, I see no problem with such a scheme. Let’s face it, most of us have a family member, a friend or colleague who could benefit from it if the need arises.
How does this effect those of us who already have income cover or mortgage cover, will we still need it, or should we be looking at how this affects us?
My advice is a government short-term fix for a long-term problem is never the total solution. Dovetailing your lawful entitlements with personal responsibility is the answer.
No illness is guaranteed to be cured after 7 months with some illness’s affecting even the fittest of people for many years or in some cases permanently.
If you have Income or Mortgage protection cover or you are considering taking out this type of cover, please seek advice from a professional.
Abacus Group advisers can help.
Craig is a Financial Adviser with a Level 5 Qualification in Financial Advice specialising in Personal Risk Insurance.