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Cape Town - The Unemployment Insurance Fund (UIF) is bracing itself for yet more claims as further job losses are expected this year.
In the financial year to the end of March claims rose 48% to R5.7bn as a result of job losses during the recession.
In the 2002/03 financial year R2bn had been paid out in claims.
The UIF’s annual report, which was submitted to the portfolio committee on labour on Friday, shows that claims increased by 173 000 to 801 110, year on year.
UIF commissioner Boas Seruwe told journalists that claims began to taper off between March and June, but in July payouts shot up by more than R100m to R505m. Over this period about 27 000 construction workers who had been working on projects for the World Cup soccer tournament were retrenched.
Seruwe expects this trend to reflect the labour situation for the rest of the year.
No one who needs help will be turned away, he said. But the UIF does have a R700m cap on total claim payments in any month.
Both employer and employee contribute 1% of the worker's salary to the fund every month, and every month the fund receives almost R900m in employee and employer contributions. Seruwe said that the UIF had increased its total investment portfolio from R44bn to R48bn.
The UIF’s yield on investments is about R350m a month.
On an annual basis its income from investments has increased by 3%, from R3.34bn to R3.45bn.
Its investments are managed mostly by the Public Investment Corporation and comprise bonds in Transnet, Eskom and the Land Bank.
Seruwe believed that pressure on the fund would systematically reduce as the economy recovered and fund benefits became exhausted.
Johannesburg, Durban, Cape Town and Pretoria – in that order – produced the largest number of claims.
As a result of the doubling of claims the fund’s surplus fell from R9.08bn to R6.85bn by end-March.
The portfolio committee however listened with concern to the disclosure of the Compensation Fund’s financial situation, which was also submitted to the committee.
The Compensation Fund financially supports workers who become injured or ill as a result of conditions or incidents at work.
Compensation Fund Commissioner Shadrack Mkhonto noted that the fund had to pay out R973m in outstanding claims to end-March as well as outstanding pension claims worth R10bn in the same period.
The latter again received a qualified audit report from the auditor-general for the year to end-March. The fund has for years been struggling with irregularities in claim payments.
- Sake24.com
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