Bloomberg reports that Employment and Labour Minister Thulas Nxesi has warned that the Unemployment Insurance Fund (UIF) could collapse if it is forced to again extend special benefits to workers who have lost income as a result of the coronavirus pandemic.
The government initially committed R40 billion from the fund, which is financed by way of monthly contributions from workers and employers, 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. According to Nxesi, 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 (Ters), but much of the money is tied up in investments such as bonds, property and equities, and cannot be easily accessed. The fund would also need money to pay out regular unemployment claims to more than 1.5 million people in the near future, he said. “If we blow this money on this temporary scheme, what will happen to the ordinary beneficiaries who have put their money into it? We cannot collapse this fund,” Nxesi warned.
- Read the full original of the report in the above regard by S'thembile Cele at Moneyweb
Get other news reports at the SA Labour News home page