A total of R30 billion has been allocated to a special National Disaster Benefit Fund, which will pay Unemployment Insurance Fund benefits for up to three months to qualifying workers whose income has been impacted by the coronavirus pandemic.
The monthly payment will be up to R3 500.
In a meeting held by the National Economic Development and Labour Council (Nedlac) government and business discussed providing relief to workers who would be losing income as businesses close.
On Monday evening, President Cyril Ramaphosa announced that in addition to existing measures - which had placed a ban on gatherings of more than 100 people, and the sale of alcohol after 18:00, the country would go into lockdown for 21 days from midnight on Thursday 26 March.
All businesses barring a handful of essential services will be expected to work from home or close.
Congress of South African Trade Unions Parliamentary Coordinator Matthew Parks told Fin24 the discussion at Nedlac was regarding a three-month intervention for workers. Parks said millions of workers could be covered at a wage of R3 500 per month for three months.
"But not every worker is going to need assistance…that money [will care for] those who need assistance," Parker said.
The UIF provides short-term relief to employees who become unemployed or are unable to work for various reasons and have been contributing towards the fund for a certain period of time, according to different salary levels.
Parks told Fin24 that the minimum amount of R3 500 might not be enough, adding that depending on different workers’ salary levels, R3 500 might be a significant salary cut.
However, he said, workers will be covered even if their UIF contributions are limited.
"Based upon the existing UIF calculations formula, no worker should get less than R3 500, and all workers will be covered if they need help, even if they didn’t have enough funds in their credit profile in the UIF - for example, if they started working two months ago or something like that," he said.
Parks warned that the fund is expected to cater for a large number of South Africans, which means weeks of delays could be expected before money is released to employees. An alternative arrangement, however, is for employees to pay workers and then claim as needed.
"We have agreed that the employers should pay the workers because the UIF is going to be overwhelmed.
"The employer should then claim back as needed from the UIF fund afterwards, because an employer is in a better place to withstand a bit of a delay of three weeks unlike workers who need to buy food for their families every day," said Parks.