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UIF payments ease after recession

May 24 2011 12:09 Sapa

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Cape Town - The Unemployment Insurance Fund (UIF) paid benefits of R5.3bn to 693 000 beneficiaries in the 2010/11 financial year up to March, Labour Minister Mildred Oliphant said on Tuesday.

This compared to 779 604 beneficiaries with a total value R5.7bn the previous year, she told the National Assembly during debate on her budget vote.

The fund experienced a slight drop in unemployment benefit payments compared to the same period in 2009/10. This was mainly due to the effects of the recession wearing off, she said.

"This once again highlights the importance of the UIF as a safety net during times of unemployment and economic crisis."

The UIF had invested 68% of its investment portfolio in central government, municipal and parastatal bonds and money market instruments supporting infrastructure projects that would create and sustain jobs.

The fund had identified a number of projects in pursuit of the creation of decent work in South Africa. Its contribution comprised both commercial and social responsible investment. This was an investment of R35bn of the R52bn portfolio, Oliphant said.

The UIF had also invested in the Industrial Development Corporation through the purchase of a R2bn bond during 2010, with the aim of creating and sustaining jobs.

These funds were available to start up businesses, provide a debt portion of expansionary acquisitions for existing businesses and facilitate working capital-funded expansions.

The UIF had also taken further steps by setting aside R1bn over the 2009/10 - 2013/14 medium term period for schemes aimed at reintegrating unemployed UIF beneficiaries back into employment.

The scheme involved participation by various sector education and training authorities in re-skilling the unemployed in critical scarce and soft skills.

The fund was also providing assistance to Productivity SA through allocation of funding to the social plan. For the 2010/11 financial year, it had committed R48m towards the plan.

"In the financial year 2011/2012, we aim to save 20 000 jobs through the social plan interventions," she said.

Turning to the Compensation Fund, which caters for those injured on duty, Oliphant said the fund had processed claims and paid compensation benefits in 2010/11 amounting to R2.1bn.

In terms of medical claims, the fund paid 186 563 medical accounts in 2010/11 at an amount of R1.9bn, as compared to 135 829 at R1.5bn during the same period in 2009/10.

Revenue of R4.5bn was raised in 2010/11. The increased capacity in debt collection yielded positive results as R431m debt had been recovered, she said.

The fund's total investments increased by R3.2bn from R23.3bn to R26.5bn in the year under review.

The fund was aiming to increase the number of registered employers in the current financial year to improve revenue collection through employer assessments.

"To promote return to work, develop skills and improve functionality of injured and diseased employees, the fund has begun developing an integrated comprehensive policy framework for rehabilitation, reintegration and return to work of its beneficiaries."

This would require amendment to the Compensation for Occupational Injuries and Diseases Act, and the amendments were projected to be promulgated in 2014/15.

Oliphant said the implementation of the Compensation Fund turnaround strategy was at an advanced stage.

This was aimed at improving claims turnaround time, and bringing Compensation Fund services closer to the people through decentralisation and job creation.

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