Act Party welfare policy: payout based on worker's earnings

Act is looking to revamp welfare in New Zealand. Photo / Mark Mitchell.

The Act Party is proposing an overhaul of New Zealand's welfare scheme for unemployed workers.

The policy unveiled today by party leader David Seymour and Employment Spokesperson Nicole Mckee proposes a worker who loses their job would be able to claim 55 per cent of their average weekly earnings.

The policy would be capped at a maximum amount of $60,000 for a year.

Rather than increasing tax rates to pay for the policy, Act proposes dedicating 0.55 per cent of income tax at current rates to a ring-fenced employment insurance fund.

Act would like to see the proportion of the levy adjust to match unemployment rates, increasing during periods of high employment and decreasing when unemployment is low.

"ACT's employment insurance scheme would be fairer than the current system because people get paid out in proportion to what they pay in, rather than a flat benefit rate regardless of their outgoings or previous tax contributions," said McKee.

"Our welfare system is due for a serious overhaul. It imposes a one-size-fits-all solution that works for no-one. It fails people trapped in long-term dependency. It fails workers who pay generously into a scheme that does not support them adequately if they unexpectedly lose their job. It fails to address the realities of a modern economy."

Those receiving employment insurance would be expected to report fortnightly on their preparedness to work and job application activity.

McKee said that as the workforce becomes more fragmented, short-term job losses would be become a reality for more people.

"[Act's employment insurance scheme] would remove the stigma associated with collecting a benefit for people out of work for a short time through no fault of their own," she said.

"New Zealanders would be collecting an insurance payout from a fund they'd paid into for that very purpose."

Alongside its employment insurance revamp, Act also proposed changes to mental health and addiction services in the country.

ACT's Deputy Leader and Health Spokesperson Brooke van Velden proposes the establishment of an organisation called Mental Health and Addiction New Zealand (MHANZ).

This would mark an evolution of the Mental Health and Wellbeing Commission, which Act says does not have "real power" to address the challenges of mental health and addiction.

"ACT would give the Commission the power to transform mental health and addiction services by taking the $2 billion per annum currently spent through the Ministry of Health and DHBs, and channelling it to providers and patients through an upgraded Commission," van Velden said.

"MHANZ would not be a provider of services, but a world-class commissioning agency that assesses individual needs and contracts the best providers for a person's therapy and care. It would put people at the heart of the system."

The idea is to reduce bureaucracy and the administrative burden by centralising mental health and addiction care through MHANZ.

"Any provider that meets strict criteria would be able to register with MHANZ to provide treatment and care," van Velden said.

"Funding for services would be determined by and attached to the care of individuals and their needs. MHANZ would carefully monitor providers to ensure New Zealanders are receiving high-quality care."