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UIF boss backs Cosatu’s call to cast net wider

| Economic factors

The commissioner of the cash-flush Unemployment Insurance Fund (UIF) believes it has the means to expand its net of beneficiaries to include seasonal, informal and temporary workers, as suggested by the Congress of South African Trade Unions (Cosatu).

The first step in this process has been taken with the tabling of the Unemployment Insurance Amendment Bill in Parliament, which proposes to extend unemployment benefits from eight months to 12 months, as well as other more generous measures.

UIF commissioner Boas Seruwe said on Wednesday the inclusion of the self-employed would be considered next, followed by other categories of workers.

Mr Seruwe said expanding the net of beneficiaries had been discussed during National Economic Development and Labour Council (Nedlac) deliberations on the bill.

Mr Seruwe noted that, with R120bn in accumulated reserves, the fund had ample resources to extend benefits.

Its actuaries had estimated that the cost of lengthening the benefit period to 12 months would amount to R2.8bn, or 39% of the benefit payments of 2014-15.

He rejected the suggestion that the annual growth in the fund’s accumulated reserves indicated that employers were paying too much in levies, which amount to a 1% contribution by employers and 1% by employees.

In the 2014-15 financial year, the fund collected R16bn from employers, but paid out only R7bn in benefits to 708,467 claimants.

Mr Seruwe said the problem was rather noncompliance and the failure of employers to register their workers for benefits.

The levy was much lower than that paid internationally, he said. "The problem is that we are not paying enough benefits."

The huge reserves at the fund’s disposal prompted the Treasury last year to propose a contribution holiday for employers as a form of tax relief, but labour shot this down and it was not adopted.

Cosatu parliamentary officer Matthew Parks called on Wednesday on the UIF to extend unemployment benefits to those who resigned without alternative work, as well as seasonal, informal and short-time workers. Provision should also be made for paternity, parental and adoption leave, Mr Parks said in a submission to Parliament’s labour committee during public hearings on the bill.

The bill extends benefits to public sector workers, provides for the payment of benefits to contributors who lose part of their income because of reduced working hours and extends maternity benefits in cases of miscarriage in the third trimester, or if the child is stillborn. Maternity benefits will be paid at a fixed rate of 66% of earnings.

Both Cosatu and the Federation of Unions of SA welcomed the "progressive" bill.

However, Cosatu objected to a clause that would deprive women who have abortions of maternity benefits. This clause was introduced into the bill after its unanimous adoption at Nedlac.

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