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More than R1.6bn paid by UIF for Covid-19 relief - Thulas Nxesi

Labour minister Thulas Nxesi says Sars is waiting on the sidelines to help if the system for UIF claims crashes.
Labour minister Thulas Nxesi says Sars is waiting on the sidelines to help if the system for UIF claims crashes.
Image: Esa Alexander

More than 600,000 workers have benefited from the Unemployment Insurance Fund relief scheme since the declaration of the Covid-19 lockdown.

Employment and labour minister Thulas Nxesi told parliament on Wednesday that R1.6bn had been paid out to more than 37,000 companies and 606,000 workers by the end of business on Tuesday.

“I need to state unambiguously that the UIF is delivering,” he said.

Nxesi was addressing a meeting of parliament's oversight committees on employment and labour on his department's plans to process the UIF and Compensation Fund claims, as well as conducting inspections and enforcements during the lockdown.

Nxesi said they continue to process claims as they come in and are also finalising applications which will be paid out shortly from the bargaining councils and employer associations in the engineering, textile and clothing, restaurants and catering as well as the metal sectors. Together these sectors represent almost 1.8-million workers, said the minister.

The road and freight bargaining council has paid out about R150m from its own funds to 13,000 workers. Nxesi applauded the sector, saying they were now in the process of reimbursing this amount from the UIF. This bargaining council has also topped up the difference between UIF benefits and normal salaries, said Nxesi.

“We are encouraging all employers who can pay the workers to do so and claim from the fund.”

Besides the Covid-19 relief, the department was continuing to pay the normal UIF beneficiaries from the unemployment fund, maternity, paternity and deaths. “Since the lockdown we have disbursed almost R522m across the nine provinces to those normal beneficiaries,” said the minister.

Nxesi said they had expected that the UIF would be overwhelmed by the volume of applications. “It was clear that the fund would be overwhelmed by the volume of individual claims,” he said.

The UIF has more than 1.8-million employers representing more than 8-million workers. To help employers and individuals, the capacity of the UIF call centre was strengthened by increasing the number of operators from 25 to 200.

Nxesi said they were working closely with the insurance and banking sectors to strengthen IT systems to cope with the volume of transactions. Revenue service Sars was helping with expediting the payments to various disbursement hubs.

Because of concerns that the traditional model of individual walk-in claims at labour centres would lead to mass queues, compromising the goal of social distancing and endangering the staff and the public, people were encouraged to complete online applications for faster processing and to maintain social distancing.

The department also decided to move to a system of mass disbursements of the benefits through employers, sectoral associations and the bargaining councils. But this required an agreement from the social partners at Nedlac and from individual bargaining councils and employers. This, Nxesi said, could not happen overnight and led to delays so people were requested to make submissions only after the consensus was reached at those talks.

“Even those submissions, we had to verify, you don't just get this thing and pay.”

Nxesi said they still encountered problems with some employers who are not applying on behalf of their employees. The Covid-19 benefit claims have also flagged non-compliance among some employers, where deductions for UIF are made from employees but not forwarded to the fund, said the minister.

They also picked up that other employers have been understating the size of their payroll for purposes of UIF deductions and then claiming against a much larger number of employees.

Nxesi, however, gave an undertaking that the sins of the employer will not be visited upon the employees and that benefits would still be paid out. He called upon employers to use this period to regularise their situation.

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