Fin24

Compensation fund reports R3bn surplus

2011-07-05 20:34

Johannesburg - The labour department's compensation fund has reported a surplus of R3.2 billion in the past financial year, fund commissioner Shadrack Mkhonto said on Tuesday

"This is as a result of the increase in the number of companies that are registered with the fund. The number of these companies is currently standing at 420 000," Mkhonto said in a statement.

The fund raised R5.2bn in assessment revenue compared to R4.8bn in the previous financial year, an increase of eight percent.

The accumulated financial standing of the fund was R26.5bn, said Mkhonto.

Five percent of this would go towards investment in job creation projects.

"The compensation fund is the biggest medical aid in the country covering more than 11 million members, most of whom are workers and employers," he said.

The fund, which is financed by levies paid by employers, compensates workers who are injured or suffer from diseases contracted during their employment. It also covers death resulting from such injuries or diseases.

The fund became embroiled in controversy last year when a presentation to Parliament's portfolio committee on labour revealed a R1bn decrease in compensation paid out to injured workers in the 2009/10 financial year.

Comments
  • jock - 2011-07-05 22:36

    your levies are too high

  • Werner - 2011-07-06 00:02

    I can just imagine a few 'enterprising' types trying to apply for a juicy job in those departments now.

  • Peter - 2011-07-06 20:56

    The reason the fund is in surplus is because medical practitioners have given up claiming from the fund for the services.The administration is in a mess, and a doctor can wait 1-2 years to get paid (sometimes as little as R300!).Many doctors just refuse to attend to Workman's Comp patients, so the fund wins (keeps its funds) and the patients lose out, because they are simply not getting the service that they should get and that is payed for by their levies.Worse case senario is that the injured workman dies...

  • Deon Buhrs - 2011-07-07 09:21

    The problem with the system is accountability. The employer is paying the levies, while the employee is left to fight for his benefits, and for the medical service providers to get paid! Only when the providers start billing the employer for the medical care of the injured on duty, will the fund be accountable for the levies paid. It is not uncommon for healthcare providers to wait up to 2 years to get paid for services delivered. During which time they need to pay salaries and tax on the turnover amount. I find it interesting that Mr Mkhonto refers to the fund as "the largest medical aid in the country! When challenged to pay the service providers within 30 days of rendering of the account, as enforced in the medcial schemes act, they are quick to state that they are not a medical aid! So what is it then honourable sir? Finally, if the service providers were paid within 30 days, perhaps a lower fee could be charged for services, more in line with the medical schemes rates, saving the fund even more money. This can be used to introduce a proper electronic claims processing system to the benefit of everyone - you should see the paper piled up in the offices in Pretoria, waiting to be processed!

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