The Unemployment Insurance Act, 2001 (Act No. 63 of 2001) came into operation on 1 April 2002. The purpose of the Act was to establish an Unemployment Insurance Fund (UIF) to which employers and employees contribute and from which employees who become unemployed, or their beneficiaries as the case may be, can benefit. In that regard, the harmful economic and social effects of unemployment can be alleviated.
Over the years, the Fund has grown immensely to over R83 billion. During economic meltdown, the Fund responded by contributing to training lay-offs by helping companies that were facing economic distress to cope with the crisis. Rather than employees being laid off, they were retrained and absorbed back by their companies. Furthermore, jointly with the mining sector, the Fund is contributing to the housing development to the communities of Northwest province.
In order to improve service delivery by the Fund, the Unemployment Insurance Board decided to recommend to the Minister of Labour that the Act should be amended. The Minister of Labour tabled the Bill to Parliament and the Cabinet has approved the Unemployment Insurance Amendment Bill.
The proposed amendments to the Unemployment Insurance Bill need to address the issue of workers who are presently excluded in the Act and by so doing, to conform with the International Labour Organisation standards; improve payment of benefits to contributors; and extend the period within which benefits are payable.
This is the second amendment to the Unemployment Insurance Act following the first amendment made in 2003. The proposed amendments to the Act deal with a number of issues namely:
- to include learners; public servants and foreign workers who are currently not covered in terms of the provisions of the Unemployment Insurance Act as it stands presently.
- to extend the period of payment of benefits to the contributor from eight months to twelve months.
- to extend the period in which a contributor can lodge a claim(from six months to twelve months).
- to allow beneficiaries to claim if they have credits regardless of when they last submitted a claim.
- to provide for the nomination of beneficiaries in case of death benefits.
- to assist in financing the employment promotion projects by the Public Employment Services
- to give powers to the appeals committee to adjudicate on late applications for benefits
- to give the Minister the power to vary the income replacement rate through regulations.
Now the Department of Labour releases the Bill for public comments. After encapsulating public comments in the Bill, it will then be tabled at NEDLAC for social partners to deliberate on the Bill.
For more information contact:
Musa Zondi
Ministerial Spokesperson
Cell: 082 901 8081
