Income insurance scheme risks embedding a two-tier system

To benefit everyone, no matter their circumstances, the Government needs to put equity at the heart of income support, while also making urgent changes to the welfare system to free people from poverty.

“Ensuring everyone has enough to live on and provide for their families, including those not in paid employment, must remain the priority as the Government moves to introduce an income insurance scheme,” says Green Party Social Development & Employment spokesperson Ricardo Menéndez March.

“Most of us work to earn an income to provide for our families, and if we lose that income through no fault of our own we should be supported to continue providing for our loved ones as we consider future opportunities. However, the Government’s proposed Income Insurance Scheme is not equitable enough to support people based on their needs.

“Under the Government’s current proposals support will be available to people based on their current income and work history. This means lower levels of support for those who have been earning less, including those in casual or seasonal work, and/or those with caring responsibilities. Because of who predominantly does this type of work, we know that it will be young, female, and Māori and Pacific people who will get the lowest payments from this long-awaited new scheme.

“There also needs to be support to help people on lower incomes cover the cost of contributing to the scheme. For the thousands of families struggling right now to put food on the table, the 1.37% contribution that will have to come from their existing earnings could be the difference between making ends meet or not.

“The Greens also want to see welfare reform prioritised. Otherwise there is a risk that the Government’s proposals will create a two-tier system for people who are already unemployed, single parents, migrants, and people with existing health conditions which mean they’re unable to work,” says Ricardo Menéndez March.

Jan Logie, the Green Party’s spokesperson for Workplace Relations and Safety added: “The Government’s proposed Income Insurance Scheme does not replace the urgent need for a much broader and comprehensive overhaul of the welfare system. To free people from the constraints of poverty, the Government needs to prioritise changes that will benefit those excluded from working full-time and the lowest income earners. This includes a Guaranteed Minimum Income, individualising benefits, and an urgent boost to income support. A strong welfare system means people do not feel forced to take a lower paid job just to make ends meet.

“The Green Party will continue to argue strongly for changes to be made to the welfare system so everyone has enough to live on. Now more than ever, with the risk of long COVID, we need to make sure support is equitable regardless of people’s circumstances,” says Jan Logie. 

ENDS

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