New Zealand is designing a social unemployment insurance scheme to enable workers who lose their job to retain about 80% of their income for a period of time.

Over coming months, the Social Insurance Tripartite Working Group – made up of the government, Business NZ and the New Zealand Council of Trade Unions – will consult stakeholders on what the right settings could be to manage the cost of running the scheme.

There will be wider public consultation later this year.

Minister of Finance Grant Robertson says any such scheme would be about supporting workers through a job transition, would strengthen the nation’s safety net and be an appropriate legacy after COVID-19 which has exposed how vulnerable employment can be.

“It complements the support available through the welfare system for those out of work for a variety of reasons,” Mr Robertson said.

The scheme idea comes after ad-hoc programs following the Global Financial Crisis, Canterbury earthquakes and COVID-19 led to calls for a more enduring solution.

“A social unemployment insurance scheme would cushion the impact of a job loss,” Mr Robertson said. “We’re looking at a scheme that could provide those who lose their jobs with around 80% of their income, with minimum and maximum caps.”

The insurance scheme would also give the New Zealand workforce more flexibility to respond to changes in technology which reduces demand for some skills.