Department of Labour to use billion-rand surplus to extend UIF benefits

Unemployed workers will be paid out for up to a full year

Photo of women waiting by a road

Unemployed workers will soon be able to claim up to a year’s benefits instead of eight months. Archive photo: Thembela Ntongana

By Annie Cebulski

11 June 2018

Sweeping changes to the Unemployment Insurance Act will mean that contributors who lose their jobs can draw benefits for up to a year instead of for eight months.

The Department of Labour plans to use part of the R133.3 billion surplus in the Unemployment Insurance Fund (UIF) to expand the scope and reach of benefits, through amendments to the Act which are due to come into effect soon.

Makhosonke Buthelezi, UIF Director of Communication and Marketing, told GroundUp that the benefit changes would have meant that an extra R7 billion would have been paid out between January 2017 and April 2018. The UIF paid R8.47 billion in benefits in the 2016-2017 year.

The extra benefits will be paid out from the surplus in the fund. There will not be any increases in contributions by employers or employees. Employees contribute 1% of their salary to the fund. The employer must match that amount and then transfer the money to the fund.

Buthelezi said major changes included:

The amendment Act was passed in January 2017 but has not yet come into effect.

Buthelezi said that the Department’s systems were now “98%” ready for the changes.

Matthew Park, parliamentary coordinator for the Congress of South African Trade Unions (COSATU), sees the amendments as a step in the right direction for workers’ rights, but says there are still gaps which need to be addressed in future.

“Once this goes into effect we’re going to look at the long-term unemployed, the unfair dismissals and resignations,” Park said. “You can only engage with these issues once policy takes shape.”