The department of labour is giving the new Unemployment Insurance Amendment Bill 18 months to play out before possibly introducing a radical new kind of unemployment insurance for workers who willingly resign.
The long-awaited amendment was signed into law by President Jacob Zuma this week and already aims to significantly increase the rate at which the Unemployment Insurance Fund (UIF) pays out benefits.
The UIF has been amassing an enormous surplus that National Treasury estimates would reach R175 billion by 2019 if not somehow gainfully diverted.
Over the past few years, the UIF already started investing some of that into new job-creation initiatives, an avenue that will now expand owing to the amendments.
The UIF collects 2% of compliant employers’ payrolls, about R17 billion per year.
Its benefit payments are, however, only in the region of R7 billion.
The amendments aim to push this up towards 1.5% of the payroll, UIF commissioner Teboho Maruping told City Press on Friday.
“We requested actuaries to review and tell us if this will be affordable. Will we be able to afford this for 15, 20 years?
“At this stage, we want to bring down the surplus to a certain number, but we have not really determined that number yet.”
After 18 months, the department will review the effect on the surplus and then mull introducing yet more changes.
One mooted use for UIF money is a benefit for people who resign from their jobs as opposed to getting fired or retrenched.
Labour Minister Mildred Oliphant and her top officials held a briefing on the UIF amendments on Friday.
“We will be guided by the research,” said Oliphant.
“If we see that the fund can afford to do that, we will review the issue of whether those who resigned can benefit. Nedlac also said that they will be monitoring the fund.”
Apart from raising the rate at which traditional unemployment benefits get paid out, the amendments increase the scope for using the UIF to fund other labour market interventions.
This is called “financing re-entry” and covers an expansion of the existing Training Layoff Scheme, as well as funding for the “labour activation programme”.
This is the register of jobseekers kept at department of labour offices to be matched with registered job openings.
Thembinkosi Mkalipi, chief director of labour relations, added that financing these activities is “part of that aggressive drive to start spending the funds to alleviate poverty so that we increase the scope of our Training Layoff Scheme and be more aggressive in our approach.”Read Fin24's top stories trending on Twitter: Fin24’s top stories