Three key questions for Minister Nxesi on UIF

29 April 2020

The Democratic Alliance (DA) will write to the Minister of Employment and Labour, ThulasNxesi, asking him to answer three key questions as the fiasco mounts at the embattled Unemployment Insurance Fund (UIF).

Yesterday, Minister Nxesi suggested that many employers were withholding UIF benefits from workers on the pretext that the UIF had failed to indicate how the benefits should be allocated. He lambasted employers, saying, “They must just be honest, we [UIF] don't just pay, we pay based on the payroll”.

This is patently untrue. The Minister is trying to scapegoat employers for the UIF’s own administrative errors. The fact is that many lump-sum payments have been made to employers in terms of the Covid-19 Ters benefit with no regard whatsoever for the company’s payroll.

Many employers report receiving a payment breakdown that allocates and misallocates funds to individual employees without rhyme or reason.

Minister Nxesi urgently needs to answer the following questions instead of trying to shift blame onto employers, most of whom just want to give their employees their full dues as they struggle to put food on the table at month-end.

Firstly, why are the claims on behalf of so many foreign national workers being rejected by the Covid-19 Ters scheme, when they are fully UIF-compliant?

Secondly, how exactly is SARS assisting the UIF to process and pay the Covid-19 Ters benefit? There seems to be no marriage of information between the UIF and SARS. Some companies report that up to two-thirds of their workforce have not benefited from the Covid-19 Ters scheme, even though every single worker is on the company’s payroll, they are tax-compliant companies, and they are able to furnish all the necessary EMP201 declarations that have already been submitted to SARS.

Thirdly, in many instances, the UIF has paid no benefit on the grounds that the company’s salary contribution exceeds the UIF income replacement benefit. However, in terms of Clause 5.3 of the Amended Directive issued by the UIF Commissioner on 8 April 2020, the payment should be the UIF benefit (as per clause 3.6) plus the company’s contribution provided that it is not more than the employee’s normal salary. It would seem that the UIF has processed these claims incorrectly and is not acting in line with the clear wording and intention of the Directive.

Over and above providing answers to these questions, the Minister must act to sort out the IT- and communications problems plaguing the UIF. Many employers cannot access the Covid-19 Ters website because it is constantly down. To make matters worse, phone calls and emails go unanswered.

Minister Nxesi must act swiftly to steady the ship at the UIF before it runs aground.

Issued by Michael Cardo,DA Shadow Minister for Employment and Labour, 29 April 2020