Sneak Peak: Proposed amendments to unemployment insurance act

Today, Parliament’s Portfolio Committee on Labour was made privy to the Department of Labour’s proposed amendments to the Unemployment Insurance Act (ACT No. 63 of 2001). While the Bill still has to be officially introduced to the National Assembly by Cabinet, acting Deputy Director-General, Thembinkosi Mkhaliphi, on behalf of Minister Nelisiwe Oliphant, gave MPs a summarised account of what they can expect to see in the upcoming Bill.

Two such suggestions include extending the period of unemployment insurance payments from eight to twelve months, as well as extending the time frame a contributor has to lodge a claim from six to twelve months.

Mkhaliphi started off by reminding MPs that 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”.

Since its establishment, the UIF has grown to encompass R83 billion in total assets and now, in order to improve service delivery by the Fund, the Unemployment Insurance Board suggested the Act be amended. As well as proposing to extend the period within which benefits are payable and giving powers to the Appeals Committee to adjudicate on late applications for benefits, Mkhaliphi explained the need to address access to the benefits by workers “presently excluded in the Act”.

Mkhaliphi said that as well as including public servants and learners, the proposed amendments need to refer to documented foreign workers, namely asylum seekers and refugees whose rights are already protected by labour law but they are currently unable to draw UIF benefits.

And there’s potentially good news for women: During his submission, Mkhaliphi said that maternity benefits should be de-linked from UIF, so that if women claim maternity benefits but then are retrenched down the line, they are not denied those payouts because their credit has been exhausted. The Bill also proposes to pay full maternity benefits for miscarriages occurring in the third trimester of pregnancy.

After the meeting, Independent Democrats Haniff Hoosen, told People’s Assembly that while many of the amendments seemed positive, “I would be very interested in looking at the financial impact analysis of what is being proposed... It’s positive that from 2002 the fund has built up and has been reduced from being in a critical state, and it’s better than where it was but we don’t want to go back to that... this is just the introduction of the Bill and we have to look at it from a financial cost point of view”.

After the meeting Labour Committee Chairperson Mamagase Nchabeleng told People’s Assembly: “This is an informal discussion of the Committee so I can’t really comment about what was said informally until it is referred to the Committee by Cabinet and this matter is going to be before Cabinet tomorrow”.

Instead of talking directly to the contents of the amendments per se, when asked if he could mention why changes to UIF were needed in the first place, Nchabeleng said that “it will advantage vulnerable workers... with the rural nature of our country and communications problems and issues related to illiteracy, we have to extend the months from 6 months to one year. This is money that is invested by workers for the rainy days and if you get information that you only know this week that the following week is the six month expiry date then you will be disappointed”.

Earlier Hoosen said, “It will help with the conditions of unemployment as it will give people a little bit more space to apply for benefits and all of those things are positive but I am not so sure it is going to have a positive impact on unemployment. I worry that the longer an individual has to be able to apply for unemployment benefits the more it becomes an incentive for them to stay at be home... I think the twelve months could be problematic but I think we need to look at it and study it more carefully; to consult with our caucus”.

Nchabeleng ended his chat with People’s Assembly by saying: “I would love this Bill to be passed before the end of this session of Parliament”. This will be a push considering Parliament rises on 13 March.