Income Protection Insurance
May 22, 2025
What is Income Protection Insurance?
Your income is often your biggest asset and losing it can turn life upside down. If you’re unable to work—either temporarily or permanently—because you’re sick or injured, Income Protection Insurance will provide you with money to live on as a monthly payment while you’re not receiving your salary or wage.
Income Protection Insurance benefits:
Income support
Pays you a monthly benefit if you’re unable to work because of illness or injury
Rehabilitation & retraining support
Helps you with your rehabilitation and retraining costs
Recurrent disability
Pays you a monthly benefit if you suffer the same sickness or disability within a year
Return to work
Pays you a bonus benefit if you are able to return to work
Family assist
We’ll pay for a nurse or family member to look after you at home for up to 6 months
Accommodation support
Pays for your family to be with you if they live more than 100km away
Disability reset
Allows you to claim again if you suffer a related sickness or injury
Elective surgery
Pays you a monthly benefit if you are disabled due to an elective surgery
Payment while overseas
Pays you a monthly benefit if you are disabled while overseas
Funeral assistance
We reimburse your family up to three times the monthly benefit for your funeral costs if you die
Grief support
Helps with the cost of professional grief support to cope with sudden changes
Overseas assist
Reimburse you and one support person for travel back to New Zealand if disabled overseas
New parent premium waiver
We’ll pay your premiums for six months while you’re on parental leave
Ref: Asteron Life
Key Proposed Changes 1. “Specified Contractor” Gateway Test The Bill proposes a clearer test to distinguish independent contractors from employees. If all of the following criteria are met, a worker qualifies as a specified contractor, and is excluded from the legal definition of an "employee": 1. A written agreement specifies they are an independent contractor. 2. They are not restricted from working for others (except when engaged with the contracting party). 3. They are not required to work at specified times or days, or can subcontract their work (subject to vetting/statutory compliance). 4. The contract does not terminate if the contractor declines additional work. 5. The contractor had a reasonable opportunity to obtain independent advice before entering into the arrangement. Implications: This aims to increase business flexibility and clarity. Contractors who meet the test cannot challenge their status in the Employment Relations Authority or Courts. 2. Remedy Assessment in Personal Grievances The Bill would narrow remedies available in personal grievance cases if the employee is found to have: * Committed serious misconduct (no remedies available). * Contributed to the grievance situation (no reinstatement or compensation for hurt, humiliation, or loss of benefit; other remedies may still apply but can be reduced by up to 100%). * Additionally, adjudicators (Authority or Court) must consider whether the employee’s conduct impaired the employer’s ability to act fairly, and raise the bar for procedural error claims. 3. High-Income Threshold for Unjustified Dismissal Claims Employees earning over NZD 180,000 per annum (base salary only—excluding bonuses, allowances, commissions, overtime, superannuation) would not be eligible to raise personal grievances for unjustified dismissal —unless they explicitly opt in via their employment agreement. * Key details: * A 12-month transitional period will apply for existing employees (unless they opt in earlier). * The income threshold will automatically adjust annually based on average weekly earnings, which introduces complexity in ongoing compliance. 4. End of the “30-Day Rule” for Collective Agreements * The “30-day rule”—which required terms of a collective agreement to apply to new employees for their first 30 days before they could move to an individual agreement—is to be repealed. * Under the proposed change: * Employers would provide new employees with information about collective agreements and unions. * Employees can immediately choose to sign an Individual Employment Agreement (IEA), which may include a **90-day trial period** if agreed. Additional Context & Commentary * Intent and Government Rationale: The Bill is positioned by the Government as a means to enhance labour market flexibility, reduce compliance costs, boost business innovation, and rebalance employer-employee interests, particularly in the personal grievance sphere. * Current Status: As of July 2025, public submissions were open (closing 13 August 2025), and the Bill was advancing through the select committee and readings. * Notably, in June 2025 the Parliament rejected amendments proposing to delay commencement to June 2026, keeping an earlier timeline —perhaps December 2025—for enactment. Summary Table Key Change - Description & Effects “Specified Contractor” Test - Workers meeting five criteria are excluded from employee status—limiting legal challenges Remedy Restrictions - Serious misconduct or employee contribution reduces or eliminates remedies $180,000 Threshold - High-earning employees excluded from unfair dismissal claims unless they opt in Repeal of 30-Day Rule - Allows immediate use of IEAs and 90-day trials for new hires, bypassing collective terms What to Watch Next Select Committee Process: Ongoing debates, public submissions, and possible amendments. Threshold Adjustments: Details on how the automatic salary threshold updates will work. Implementation Timeline: While December 2025 is possible, it depends on the legislative process and Royal Assent. Sources: [1]: https://www.bellgully.com/insights/the-employment-relations-amendment-bill-has-landed-and-it-has-the-potential-to-transform-employment-relations-in-new-zealand/?utm_source=chatgpt.com "The Employment Relations Amendment Bill has landed" [2]: https://www.dentons.co.nz/en/insights/articles/2025/june/19/employment-relations-amendment-bill-2025?utm_source=chatgpt.com "Employment Relations Amendment Bill 2025" [3]: https://www.laneneave.co.nz/news-events/era-four-key-changes/?utm_source=chatgpt.com "Explained: Employment Relations Amendment Bill" [4]: https://www.parliament.nz/en/pb/hansard-debates/rhr/combined/HansDeb_20250624_20250625_52?utm_source=chatgpt.com "Employment Relations (Pay Deductions for Partial Strikes) ..." [5]: https://knowledge.dlapiper.com/dlapiperknowledge/globalemploymentlatestdevelopments/2025/significant-amendments-to-the-employment-relations-act?utm_source=chatgpt.com "Significant amendments to the Employment Relations Act" [6]: https://www.lexology.com/library/detail.aspx?g=b905b99b-6503-4444-b0a3-be27a0d206fa&utm_source=chatgpt.com "Key insights into the new Employment Relations ..." [7]: https://www.parliament.nz/en/pb/sc/committees-press-releases/public-submissions-open-on-the-employment-relations-amendment-bill/?utm_source=chatgpt.com "Public submissions open on the Employment Relations ..." [8]: https://www.mbie.govt.nz/dmsdocument/30958-employment-relations-amendment-bill-2025-approval-for-introduction-proactiverelease-pdf?utm_source=chatgpt.com "Employment Relations Amendment Bill 2025: Approval for ..." [9]: https://www.humankind.nz/blog/an-update-on-employment-law-changes?utm_source=chatgpt.com "An update on employment law changes - Humankind NZ"
What is a shareholders’ agreement? A shareholders’ agreement is essentially a contract between company shareholders. It regulates and guides decision-making. Shareholder agreements deal with matters such as: Who the company directors and shareholders are (plus their rights and responsibilities) Voting rights (i.e. which shareholders – or what percentage of shareholders – need to approve various activities and transactions) Restraints of trade that apply to directors and shareholders Sale of company assets Funding, guarantee and insurance arrangements Shareholder agreements also provide a process for complicated situations, for example: Where one of the shareholders dies or becomes totally and permanently disabled If a shareholder-employee leaves employment of the company Where one of the shareholders wants to sell their shares If a dispute crops up between shareholders Shareholder agreements bind shareholders to the agreed terms. They also provide guidance when navigating business issues that aren’t covered by the Companies Act 1993. A shareholders’ agreement can be prepared for a new company or an established business that has traded extensively. If necessary, the agreement can be amended to account for company growth and capital funding Why prepare a shareholders’ agreement? Shareholder agreements aren’t mandatory, but we strongly advise having one. As with all relationships, a business relationship is likely to have its ups and downs. To demonstrate the importance of a shareholders’ agreement, let’s consider an example scenario where an agreement would be helpful: Two business partners form a company as 50/50 shareholders. They decide not to enter into a shareholders’ agreement. The pair successfully trade for several years and enjoy a healthy working relationship, managing company affairs as a team and resolving disputes amicably. Shareholder A dies suddenly. Without a shareholders’ agreement in place, Shareholder A’s 50% shareholding transfers to his wife by virtue of survivorship. His wife is now an equal shareholder of the company. The Companies Act 1993 doesn’t cover this type of situation, so Shareholder A’s wife isn’t obliged to sell her shares to Shareholder B. The company continues to trade while Shareholder A’s wife enjoys the fruits of the company’s success, without materially contributing to the running of the business. A tailored shareholders’ agreement can determine a share sale procedure in the event of shareholder death or incapacitation, ensuring a fair outcome for everyone involved. Most people enter into business arrangements thinking they’ll always be able to work through issues amicably. Unfortunately, that isn’t always the case, particularly when the personal relationship becomes difficult or if one of the shareholders dies and suddenly the remaining shareholders are finding themselves dealing with the deceased person’s family or representatives. A shareholders’ agreement can help you reach a satisfactory resolution to problems efficiently and at minimal cost, compared to the cost of trying to resolve issues without a shareholders’ agreement. Ref: 1 August 2022 • Commercial law
An area of uncertainty for employers when contemplating restructuring & redundancy processes concern obligations associated with disclosing relevant information. The law requires employers provide employees who are adversely affected by any formal processes, for example - a redundancy process - with access to all relevant information (in writing) before any decisions are made. This is a requirement that employers often completely overlook and/or fail to do their due diligence on before commencing change processes with their employees. The important point to make here is: That failure to provide employees with relevant information in these situations can be fatal to defending subsequent personal grievance claim(s). Namely, a claim for unjustified dismissal premised on employer failing to provide access to all relevant information. Problems associated with this area of law can be illustrated in a recent judgment by the Court of Appeal in Birthing Centre Ltd v Matas [2024] NZCA 139, which dismissed an appeal from the Employment Court in Birthing Centre Ltd v Matas [2023] NZEmpC 162 that was in favour of five ex-employees who were employed as midwives. In this case, Birthing Centre Limited (‘BCL’) transferred its services to MidCentral District Health Board (‘MDHB’). The commercial agreement between the parties had a condition that the arrangement be strictly confidential. After the transaction was completed, announcements followed, and concerns subsequently picked up by Midwifery Employment Representation and Advisory Services Union (‘the Union’). In summary, employees were informed they would be transferred to MDHB – but the deal had already been completed by that stage. Five midwives who worked for BCL raised personal grievance claims for unjustified dismissal. Their claims centred on the lack of consultation and provisions of information occurring prior to being notified of their employment transferring. BCL attempted to argue that it was exempted from consulting with employees because there was a good reason to maintain confidentiality in terms of the commercial agreement between BCL and MDHB. The Court of Appeal declined the application for leave to appeal - essentially confirming the ruling of the Employment Court which was: ". . . A fair and reasonable employer could in the circumstances have considered options for exploring whether it could maintain the integrity of BCL’s commercial position as well as the DHB’s commercial position, while informing its employees of the proposal in a confidential way". The Employment Court determined that there had been a failure by the BCL to consider: Options for exploring whether the integrity of their commercial position could be maintained while informing employees of a potential sale in a confidential way. Whether providing information to the Union was viable on embargoed basis. Direct employees not to share information during the consultation process. Include a condition of sale that employees be consulted on a conditional basis and their views sought before the sale agreement became unconditional. As a result, remedies previously imposed in by the Employment Relations Authority (‘the Authority’) were required to be paid by BCL to the midwives. The total value of the claims exceeded $35,000.00 across each of the employees, including compensation payments for injury to feelings and four weeks wages equivalent for each of claimant. This is not to mention the legal costs and time which would have been incurred that were associated with three sets of separate legal proceedings, i.e. a determination in the Authority, the Employment Court and the Court of Appeal, which would have been significant. The outcome associated with this case is a chilling reminder to employers to ensure they do their due diligence when contemplating restructuring processes, including business transfers and sales. Failure to sufficiently plan and understand an employer’s legal obligations can translate to successful legal challenges. It is vital an employer does careful due diligence, along with understanding any specific areas of legal risk (and plan for contingencies – if necessary) before embarking on these sought of processes. If an employer is going to attempt to rely on confidentiality to withhold information from affected employees, then it must be able to show & explain why confidentiality is necessary to protect its commercial position. More importantly, employers who are considering withholding relevant information need to understand that the legal threshold for not disclosing information on grounds of ‘confidentiality’ and/or ‘commercial sensitivity’ is extremely high (and open to challenge). Accordingly, the ‘least risky’ approach is for an employer to consider making provision of all relevant information available to the affected employees via a formal consultation process before any decisions are made. Source: Employers Assistance Ltd 7.10.24