Compensation Fund members to get 7% boost

Cape Town – Labour Minister Mildred Oliphant intends increasing the amount of earnings and the monthly pensions for recipients of the Compensation Fund by 7% from 1 April 2017, a gazette published on Monday revealed.

Oliphant said she intends increasing the maximum amount of earnings to an amount of R403 500 per year from 1 April 2017, 7% higher than the current R377 097.

She also said she intends to increase monthly pensions by 7%, which is a two percentage point increase from the 5% hike on 1 April 2016.

This will be in “respect of accidents which occurred before 1 April 2016 as well as occupational diseases which were diagnosed before 1 April 2016, with a pro-rata increase applicable for accidents that occurred and occupational diseases that were diagnosed from 1 April 2016 to 31 March 2017 with effect from 1 April 2017”.

The Compensation Fund paid R2bn on medical claims, R132m on compensation benefits and R960m on monthly pensions in the 2015/16 financial year, Compensation Fund Commissioner Vuyo Mafata said in his annual report in 2016.

National Treasury said in its 2016 budget report that the Compensation Fund was in a financially strong position.

“The 2014 actuarial valuation showed an accumulated surplus of R23bn and a technical liability of R18bn. The value of investments grew by 20% to R49.8bn in 2014/15, while in-year revenues totalled R14.5bn. Expenditure fell from R15.9bn in 2013/14 to R7.9bn in 2014/15.”

However, it revised down its revenue projections by about R5bn in each year from 2015/16 to 2017/18.

The Compensation Fund pays benefits to workers who experience loss of income as a result of injury, death or disease in the course of employment.

“Claims are projected to grow substantially over the medium term due to enhancements to the fund’s integrated claims management system and associated staff training,” Treasury said.

“New claims registered are expected to increase from 225 511 in 2014/15 to 392 229 in 2018/19, of which 95% will be finalised within one year. Work is in progress to clear the backlog of claims and improve turnaround times.”