The idea of a new form of income insurance is being seen as a knee-jerk reaction to the Covid-19 pandemic.

The scheme has been put forward as part of the 2021 Budget, but there is no money allocated to it yet.

It would give people 80 per cent of their salary or wages if they lost their job, like ACC.

Rival Wealth financial advisor Tim Fairbrother told Tim Dower he is not sure it is something the country really needs.

"As a business owner, I'm sort of a bit shocked that we're just getting another cost."

Fairbrother says people should have their own rainy day fund in case they lose their jobs, rather than an expensive redundancy scheme.

He adds it may be better to fund budgeting classes at schools.

"As opposed to something which I think could be actually pretty expensive to be able to fund, in terms of if we're looking at funding an insurance for five million people."