Labour Minister warns of UIF collapse over virus benefits
South Africa’s Employment and Labour Minister Thulas Nxesi has warned that the state-run Unemployment Insurance Fund could collapse if it is forced to again extend special benefits to workers who’ve lost income as a result of the coronavirus pandemic.
The government initially committed R40 billion from the fund, which is financed using workers’ monthly contributions, to subsidise the special benefits for three months. The relief, which was given to those whose employers couldn’t afford to pay them or who were forced to take leave, was subsequently extended by a further four months until mid-October. Almost R53 billion has been dispensed to more than 4.7 million people so far.
Read: UIF’s Ters paid out R161m in irregular payments
While there have been reports that the UIF has R140 billion available that could be used to further extend the so-called Temporary Employer-Employee Relief Scheme, much of the money is tied up in investments such as bonds, property and equities, and can’t be easily accessed, according to Nxesi. The fund will also need money to pay out regular unemployment claims to more than 1.5 million people in the near future, he said in an interview.
“If we blow this money on this temporary scheme, what will happen to the ordinary beneficiaries who have put their money into it?” he said. “We cannot collapse this fund.”
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