Home South African Labour minister must diffuse UIF ‘ticking time bomb’ – DA

Labour minister must diffuse UIF ‘ticking time bomb’ – DA

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Party says Nxesi ‘missing in action’ as workers wait for UIF to accept May claims

LABOUR and Employment Minister Thulas Nxesi must play open cards about the worsening calamity at the Unemployment Insurance Fund (UIF) as desperate workers wait for it to start accepting claims for Covid-19 benefits for May, the DA said on Wednesday.

DA labour spokesperson Michael Cardo said he received assurances from UIF commissioner Teboho Maruping last Friday that the fund would open for online applications for funding from the Temporary Employer/Employee Relief Scheme (TERS) this month. Nxesi promised that it would go online at midnight on Tuesday.

But on Wednesday morning, this was still not the case.

“This constitutes a ticking time bomb waiting to explode. It means that millions of wage earners face the prospect of receiving no income for May until the middle of June at the very earliest,” Cardo said.

“When the benefit finally arrives, it will be too little too late. Employers and employees have bills to pay and families to feed right now. They cannot wait.” 

He said he had been calling on Nxesi to address the situation since Monday, but to no avail. “By and large, the minister remains missing in action.”

The UIF had so far paid out about R15 billion of the R40 billion allocated for TERS benefits to around three million workers, according to a statement by Nxesi late on Tuesday.

However, the DA said 76 000 employers and 559 000 employees had claims worth R2.3 billion rejected either because they were not identified on the UIF system or without any clear reason.

Cardo and his fellow labour spokesperson for the party, Michael Bagraim, said the DA was overwhelmed with calls from employees and workers of all political persuasions seeking clarity on when they would be able to access the TERS benefit, which was launched in response to the Covid-19 health crisis.

Bagraim said it was clear that workers would not be paid UIF benefits come the end of May because the process took at least two weeks from application to payout. Moreover, most had not been paid for April.

“We have people lagging from the end of April. Now we know that nobody is going to get paid at the end of May because it cannot happen physically even if they are magicians, they could not do it,” he told a media briefing.

“So what it means is that some people are going two months without payment, with nothing. Very few families, very few workers, have extra money in their back pocket to go and pay for food on a daily basis. 

“The workforce of South Africa are being forced very, very quickly into absolute poverty. It does not help to have fancy legislation such as minimum wage and protection of jobs when at the end of the day we are forcing our workforce into starvation.”

The men also raised the issue of projected retrenchments, which were set to increase as the lockdown and pandemic continued to devastate the economy. Finance Minister Tito Mboweni has placed the projection at between three and seven million people.

Nxesi did the same in his Tuesday statement, saying: “We expect an increase in labour-related disputes due to retrenchments and termination of employment as employers try to stay afloat. This would undoubtedly place further strain on our ability to meet our social security obligations to the public.”

The UIF has about R135 billion in its portfolio at the moment, about half of it in government bonds. 

The issue of the May applications was expected to be raised at Nedlac on Wednesday afternoon. The forum has heard repeated calls for the South African Revenue Service to be drafted in to provide the UIF with extra capacity during the crisis.

Bagraim called for TERS applications and payments to be shifted to SARS immediately.

Nxesi this week amended a directive pertaining to the TERS scheme to allow workers whose employers had not registered them for UIF or failed to pay the necessary contributions to apply to it for support.

The concession followed a legal challenge from organisations representing domestic workers and farm labourers.

– African News Agency (ANA)