Both the Unemployment Insurance Fund (UIF) and the Compensation Fund urgently need a “risk-adjusted strategy” of their own to address the monumental challenges posed by Covid-19.
So far the UIF has been dogged by seemingly insurmountable challenges in processing and paying the Covid-19 Ters benefit.
The Compensation Fund, which has been dysfunctional for 20 years, is going to be strained to breaking point as people return to work and – with the inevitable spread of Covid-19 in the workplace – start submitting claims to the Fund.
Earlier this week, the Minister of Employment and Labour, Thulas Nxesi, told Parliament that because of Covid-19 and the state of the economy, “we might add another million or two to the [ranks of the unemployed]”.
It is not clear how the UIF would be able to deal with such a disastrous scenario. With many workers due to be paid today, the Covid-19 Ters benefit scheme is still beset with huge problems. Many employers report not being paid by the UIF, being underpaid, receiving no payment advice, or receiving a payment advice that allocates and misallocates funds to individual employees without rhyme or reason.
Many employers are struggling to rectify these errors through the UIF call centre and website. They will face the wrath of their employees (many of whom are registered with the UIF but have inexplicably not benefited from the Covid-19 Ters scheme) who will blame the employer and not the UIF when they receive no, or insufficient, payment today.
The UIF needs to develop a risk-adjusted strategy in a hurry and present it to the Portfolio Committee on Employment and Labour.
In the case of the Compensation Fund, serious consideration needs to be given to handing over its functions to one or more of the private sector insurance companies that are fit for purpose.