Unfortunately, job security seems to be a thing of the past, and nobody is indifferent to the threat of redundancy. Many businesses in New Zealand are having to downsize due to the COVID-19 pandemic.
Redundancy cover, often called unemployment insurance, provides extra protection in case you’re made involuntarily redundant.
You can claim up to two times under the Redundancy benefit. You must be employed full-time for six consecutive months before you are eligible to make your first claim under this benefit.
Many insurance companies and banks have stopped accepting new applications for redundancy cover since the outbreak and the New Zealand Government wage subsidy schemes were introduced.
Many mistakenly believe that by getting income protection insurance, they’re automatically covered for involuntary redundancy (i.e. dismiss from employment, through no fault of their own).
That is not the case.
How does Redundancy Insurance work?
Redundancy Insurance in New Zealand is an optional Income Protection add-on benefit, that pays a maximum $4,000 per month for 6-month, after a 30-day waiting period that begins on the date you became redundant.