According to official data, 4,53-million South Africans are unemployed. The government's employment stimulus projects have yielded few benefits so far.
UIF commissioner Boas Seruwe said yesterday the fund had drafted new legislation for the proposed benefit improvements, which he hoped would reach Parliament before the end of the 2012-13 financial year.
"We have so much money we want to improve on the benefits that we offer. We don't want to be taking from workers, we want to be giving more to the public and we don't think there will be lengthy discussions about this," Seruwe said. "We can afford these benefits, we won't suffer financial losses."
The proposed legislation would go to Labour Minister Mildred Oliphant for approval, before being sent to the Cabinet and discussed in the National Economic Development and Labour Council, he said.
The UIF said in a statement that at the end of the 2011-12 financial year, its asset base had grown to R65-billion from R54-billion in the previous year. During that period collections had risen by about 10% to R12,4-billion while spending had risen to R5,6-billion.
About 1,4-million employers representing 7,8-million employees are registered with the fund, which is part of the Department of Labour.
Over the past two years, the UIF had injected R4-billion into job-creation initiatives through the Industrial Development Corporation, Seruwe said. This had created an estimated 16 000 new jobs and saved 18 000 existing jobs.
The UIF also intends to extend the grace period during which unemployment benefits can first be claimed from the existing six months to 18 months.
The fund hoped to raise the ratio of income-replacement-to-salary - that it pays to unemployed people to 65%, up from the existing level of 45%.
"We wanted to do it now but our actuaries warned us we couldn't do this at the same time (as making the other changes). After three years we will do a review and see if we can increase the income replacement," Seruwe said.
Raymond Parsons, deputy chief executive at Business Unity SA, said South Africa needs these supportive measures given the country's unemployment challenges and the lower economic growth forecasts for the year.
"It's not a silver bullet but it's a very important safety net for the unemployed," he said.
This year, the UIF aims to invest R2,5-billion in job-creation in partnership with the state-owned Public Investment Corporation, which manages the UIF's assets.
Source: Business Day
(via I-Net Bridge