Aug 18, 2022

Mawazo Writing Africa

Writing about the main

UIF says sluggish economy, pandemic payouts are depleting fund’s coffers

If South Africa’s economy continues to suffer, workers who lose their jobs could have less to fall back on in the future as the Unemployment Insurance Fund (UIF) coffers are exhausted.

UIF Commissioner Teboho Maruping said so on Wednesday, adding that Covid-19 Ters payouts would undoubtedly have weighed on the fund’s coffers for the past two years.

Since early 2020, the aid program has been designed to supplement the incomes of employees who have been unable to cope as a result of the pandemic who lost their jobs has paid out around R61 billion.

At a media briefing on Wednesday to set out the fund’s priorities in fiscal 2021/2022, Maruping said the UIF had fraudulently or mistakenly sent millions to beneficiaries disbursed.

Maruping said UIF’s coffers have fallen from R160bn before Covid-19 to around R120bn now. When asked if he wasn’t worried about the impact of the sluggish economy on the fund, he said: “I’m worried. If the economy continues to fail in terms of job creation, entrepreneur creation and business survival, this will affect the UIF coffers.

“Sooner or later, the UIF will run out of funds. It’s a cause that we and leaders are involved in.”

But on a positive note, Maruping said UIF contributions have picked up again after falling during the pandemic. The increase has been seen over the last six months.

Somewhere our contributions are slowly increasing, but there is also a loss of jobs. There are certain markets that create jobs and others that lose jobs. So there’s an offsetting factor that we haven’t really analyzed.”

Smiso Nkosi, an inspector at the Department of Labor who leads the Follow the Money project, set up in 2020 to track fraudulent claims, said that R14 billion in payments made were traced and 91% of them were found to be correct.

He said Phase 2 of the project will prioritize cases where there have been complaints, including those related to it with businesses opened during the pandemic.

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