Unemployment Insurance Amendment Act at a glance

Online since 1.03.2017 • Filed under Advertorial • From Issue 5 - March 2017 - August 2017 page(s) 92
Unemployment Insurance Amendment Act at a glance

The Unemployment Insurance Amendment Act, which was signed into law, is widely expected to have a positive effect on the country’s workforce. It also has the potential to help stimulate the economy.

Changes brought on by the new Act strengthen the economy and widen the safety net for employees as it forces the Unemployment Insurance Fund (UIF) to free up more capital for more people; and makes claiming easier.

The UIF has done well with contributions collections, resulting in a R90-billion surplus in 2016. This financial stability enables the UIF to ringfence about R400 million to fund labour activation schemes, assisting to train unemployed people and preventing job losses by reskilling those on the verge of retrenchment.

Section 5 of clause 2 of the new amendments emphasise the utilisation of a portion of the surplus in employment creation schemes, such as the ‘Training Lay-Off’ scheme, Training of the Unemployed, and Turn Around Solutions.

The good news is that changes to the Act are not going to affect the 2% levy paid to the Fund, despite the likely increase in the payment of claims resulting from the extension of scope to all benefits and coverage of learners and public servants.

Once in effect, after the President has promulgated it through the government gazette, the new amendments in the UI Act bring the following changes:

• Contributors can claim unemployment benefits for up to 365 days, instead of 238 days, if they have worked for a continuous four-year period.

• Contributors can claim benefits if they have built up credits, regardless of whether or not they have claimed within a four-year cycle.

• Maternity benefits will be paid at a fixed rate of 66% of your normal salary.

• Public servants at national, provincial and local government level are entitled to unemployment benefits.

• People undergoing learnership training in terms of the Skills Development Act are eligible for unemployment benefits once their learnership contract ends.

• Benefits are paid to employees who lose income resulting from reduced working times.

• Excess cash in the UIF is being invested in jobcreation and other schemes aimed at keeping workers at risk of losing their jobs in employment.

• Contributors are entitled to benefits even if they receive a monthly pension from the state, or a benefit from the Compensation Fund or any unemployment fund or scheme established under the Labour Relations Act.

• Contributors have 12, instead of six months, from their last date of employment to submit applications for unemployment benefits.

• Contributors can claim illness benefits if they’ve been sick for seven consecutive days, instead of 14 days.

• Contributors are entitled to full maternity benefits for 121 days, instead of six weeks, in the event of a miscarriage during the third trimester, or a stillbirth.

• Contributors may apply for maternity benefits from eight weeks before the baby’s due date to 12 months after the child’s birth and not, as previously, four weeks before childbirth.

• Following a breadwinner’s death, contributors may apply for a dependant benefit within eight months, instead of six months.

• Contributors may nominate their beneficiaries in the case of death benefits.

• No agency or person who purports to act on behalf of an applicant may charge a fee for applying for benefits.

• After consulting with Parliament, the Minister of Labour is empowered to issue regulations that change the income replacement rate and the period over which benefits are paid.

Unemployment Insurance Fund

T +27 012 337 1680

E makhosonke.buthelezi@labour.gov.za

W www.labour.gov.za

Issue 5 - March 2017 - August 2017

Issue 5 - March 2017 - August 2017

This article was featured on page 92 of SABI Magazine Issue 5 - March 2017 - August 2017 .

Share this

Power Week Africa Conference 2018 take off 15 Sept 18
Footer ads

Subscribe to our Digital Magazine (free)