Publications
Partners
Johannesburg - The Unemployment Insurance Fund (UIF) plans to extend the period it pays benefits to retrenched workers by four months to cushion them from financial stress.
Should the UIF's plan be approved by Parliament, people who had lost their jobs would earn an income for 12 months instead of the current eight months.
"The strong financial position and the investigations by the fund’s actuaries indicate that the fund can increase the current eight-month period by a further four months," said UIF commissioner Boas Seruwe.
"The main reason for increasing the period is based on the fact that people who have lost their jobs take longer periods of time before being absorbed back into the labour market," he added.
Seruwe's comments came after the third-quarter Labour Force Survey showed that the country's unemployment rate rose marginally to 25.3% from 25.2% in the second quarter.
This meant that 4.4 million people were unemployed.
Seruwe said the UIF had experienced a steady increase in requests for the payment of unemployment benefits over the past 18 months.
The fund paid out R485m last month. In August, it paid out R379m and in July it paid out R505m.
From April to June, a large number of claims came from Gauteng (46 500), followed by the Western Cape (38 140) and KwaZulu-Natal (36 860).
The UIF approved about 97% of the claims it received, Seruwe said.
Khulile Nkushubana, general secretary of labour federation Cosatu, threw cold water on the UIF's plans.
"We would have rather preferred the period of payment to be equal to the time an individual remained unemployed," said Nkushubana.
The UIF only paid out about 45% of an individual’s last salary.
"If a domestic worker or security guard earning R2 000 is retrenched, 45% of their salary would not make much difference in their life," Nkushubana said.
Andries Bezuidenhout, a professor of sociology at the University of Pretoria, praised the UIF's initiative.
"This is wonderful news for the unemployed as we have lost many jobs due to the recession," he said.
Bezuidenhout said the money would make it easier for the unemployed to look for a job.
National Union of Mineworkers spokesperson Lesiba Seshoka also welcomed the initiative.
"It is a good idea because there are mine workers who have been without jobs for more than a year," he said.
Seruwe said the fund had adequate reserves to meet all its liabilities.
"The fund has provided for a 14% increase in claims and now the economy appears to have turned the corner for the better. This means that it is highly unlikely that the UIF will face any kind of financial crisis in the near future," he said.
In February, he announced plans to invest R1.2bn in state-run lender the Industrial Development Corporation (IDC) through the buying of a low-yield bond to stimulate job creation.
He said this week there was interest in the UIF bond and funds were channelled to recession-hit businesses that required assistance to save jobs.
"The first tranche of R500m has been issued to the IDC and more than R400m of that money has been taken up by businesses in order to create employment and retain jobs," Seruwe said.
"Next month, the IDC is expected to give a detailed report on how many jobs had been -retained and created as a result of the funds we made available."
- City Press
