At the end of March 2016, the Unemployment Insurance Fund (UIF) declared an accumulated surplus of R99 billion rand. It is estimated that the surplus will reach R175 billion by 2019. The UIF announced that they will utilise this surplus to protect existing jobs and will introduce new rules to allow more people to qualify as beneficiaries of the fund.
Other amendments being contemplated to reduce this surplus are to cover an expansion to the existing Training Layoff Scheme as well as funding the “labour activation plan”. This is the register of jobseekers kept at the Department of Labour offices to be matched with registered job openings.
The current amendments below were signed into law earlier this year:
- Benefits will now be paid out over 12 months and not eight months.
- Learners in training and civil servants will now also qualify to claim.
- Maternity Benefits increases from 54% to 66% of the salary.
- UIF benefits will not be stopped when a beneficiary dies but will be paid out to their dependents.
It is not believed however that any of these changes will make a dent to the surplus and it is surprising that the UIF amount has been increased. With effect from 01 April 2017, the maximum monthly deduction has been increased from R148.72 to R177.12.
It would be interesting to see how the Department of Labour utilises the surplus over the next year and what interventions they fund to potentially alleviate the unemployment problem facing South Africa.