The Government rejected a pandemic insurance proposal that would have guaranteed businesses and workers 80 per cent of their income for a year in favour of the wage subsidy scheme.
The revelation comes as more than 350 Kiwis a day are losing their jobs, with no end in sight to the economic uncertainty.
The head of New Zealand's largest Pacific health service says the demand for foodbank services has skyrocketed this year.
"A group that were okay. that were fine, they got good jobs they were paying their mortgage but all of a sudden find themselves out a of a job and don’t know how to navigate our welfare system," Fono's Tevita Funaki said.
Economist Brad Olsen told 1 NEWS that 2,500 New Zealanders had lost their jobs in the past week.
But Jacinda Ardern says a strong health response has been required.
"We consider that the best economic response remains a strong health response. if we get it right, we ultimately shake off restrictions faster," she said.
It comes with 350,000 jobs currently being supported by the wage subsidy, but 1 NEWS has learned the Government turned down an alternative idea for a pandemic insurance scheme.
"It [pandemic insurance] is the silver bullet approach in many senses, at the same time the cost and the scale of it do make you question just how feasible it is," Mr Olsen said.
Officials advised the government that while expensive, the pandemic insurance would be a solution to the current approach of the government to dealing with pandemic problems, but the finance minister says the Government won't be taking the idea any further.
The leader of the opposition, Judith Collins, says the subsidy isn't enough.
"What I'm seeing from the current lot is they have nothing much past a wage subsidy and even that's about to end,” she said.
Pandemic insurance proponent Michael Reddell believes insurance is a whole lot smarter than the wage subsidy.
"It's locked people into jobs in many cases - they're phantom jobs now, I mean there aren't too many tourists outside the school holidays in Queenstown or Rotorua but the way you get that wage subsidy is to stay with that employer," he said.