Accountants are taking a close look at the government's proposed income insurance scheme, to see how the costs versus benefits stack-up.
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Chartered Accountants Australia and New Zealand (CAANZ) said the scheme was a once-in-a-generation opportunity to consider how income insurance could exist alongside other employment welfare and taxation frameworks.
The scheme would offer up to seven months' income insurance for employees who had lost their job and would be administered in line with the Accident Compensation scheme, with levies paid equally by employers and employees.
"Income insurance would be a significant policy and system change for New Zealand's labour market and wider economy,"
CAANZ country head Peter Vial said.
"I suspect that, while many people will support income insurance in principle, they will be concerned with making sure we cut our cloth to fit our purse.
If we do introduce a scheme, it needs to be as fair, efficient, and economically viable."
He said some of the considerations for CAANZ's 25,000 members were around affordability and whether the 2023 timeline for the scheme's introduction was too tight.
"In fact, is now the right time to introduce such a radically new and expensive initiative?"
He said other considerations included how the costs would be split between employees and employers, and whether the costs of administration and compliance were proportionate to benefits.
Other considerations included the unintended consequences and unexpected behavioural changes, such as employees gaming the system, as well as financial implications, such as whether an employee's costs would be tax deductible.
Vial said the review would draw on international best practice, keeping in mind the differences between New Zealand and countries where such schemes already exist.
