The following statement was delivered today by the DA Shadow Minister for Employment and Labour, Dr Michael Cardo MP during a virtual press conference.
Please find an attached soundbite by Dr Michael Cardo MP.
The Democratic Alliance (DA) is calling upon the Minister of Employment and Labour, Thulas Nxesi, to involve private sector service providers in the processing and payment of Covid-19 claims submitted to the embattled Compensation Fund.
The Compensation Fund is a statutory body that provides compensation to workers who are injured or contract diseases at the workplace. It is governed by the Compensation for Occupational Injuries and Diseases Act (COIDA) of 1993.
As increasing numbers of employees return to the workplace with the easing of lockdown levels, cases of occupationally acquired Covid-19 are going to soar and then persist until a vaccine becomes widely available.
The Compensation Fund, which has a long and undistinguished history of inefficiency, maladministration and financial mismanagement is going to buckle under the weight of claims.
The huge challenges faced by the Unemployment Insurance Fund (UIF) in administering the Covid-19 Ters benefit over the past three months – which challenges the UIF still hasn’t overcome – tell a cautionary tale.
The Compensation Fund is in a much worse state of health than the UIF. Institutionally, it is far less robust than the UIF. In fact, compared with the Compensation Fund, the UIF runs like a Swiss watch.
Without private sector assistance, the Compensation Fund is likely to drop the ball spectacularly on Covid-19 COIDA claims.
The sooner the Compensation Fund outsources its functions to a private medical aid or insurance provider, the better.
Even before the advent of Covid-19, the Compensation Fund was failing miserably to process and pay claims. In October 2019, the Compensation Fund migrated to a new electronic system, called CompEasy. But the new website used to report accidents and lodge claims has been serially dysfunctional.
Every day before the national lockdown commenced on March 27, the DA was inundated with desperate pleas from healthcare practitioners who were unable to submit claims through CompEasy and who therefore were not paid.
According to one large industry survey conducted earlier this year, less than 3% of injured workers were able to have their claims submitted since October 2019 and less than 1% of claims were processed and paid, compared to 80% on the old system. As a result, some medical practices had to shut their doors, leaving their employees jobless and injured workers without the help they need.
Indeed, the Compensation Fund currently owes one group, CompSol, which represents over 2000 medical service providers, more than R716 million. CompSol manages around 43% of all COIDA cases in South Africa.
In terms of a court order, the Compensation Fund must pay or reject (with valid reasons) medical invoices within 75 calendar days. According to CompSol, the Compensation Fund’s delays in paying valid invoices have caused the Fund to rack up R80 million in mora interest and legal fees of almost R10 million. Of CompSol’s 94 legal actions against the Fund, there are 34 active cases with a combined value of R229 million.
The Compensation Fund’s delays in paying valid claims (and rejecting claims unfairly) have been described by a High Court judge as “a textbook example of an abuse of the Court process”.
This dire situation is about to get exponentially worse as more and more claims come the way of the Compensation Fund.
In terms of the COIDA notice published in the Government Gazette on 23 March 2020, a worker diagnosed with occupationally acquired Covid-19 may claim the temporary total disablement (TTD) benefit from the Compensation Fund.
When there is a confirmed case of occupationally acquired Covid-19 and where the Compensation Fund has accepted liability, the benefit must be paid from the date of diagnosis, for as long as the disablement continues, but not for a period exceeding 30 days.
In the event of death arising from occupationally acquired Covid-19, the Compensation Fund must compensate reasonable burial expenses and provide for the widow/widower’s and dependents’ pensions, where applicable.
This will translate into an administrative and financial nightmare for the Compensation Fund. The Fund does not even have the capacity to administer ordinary claims. Its finances have been a mess for years. In 2018/19, the Auditor-General was unable to determine the accuracy of benefits paid by the Fund to the tune of R5.4bn, irregular expenditure of R769m, fruitless and wasteful expenditure
of R452m, outstanding claims (noncurrent) of R9.4bn, outstanding claims (current) of R1.6bn, payables from exchange transactions of R219m and payables from nonexchange transactions of R866m.
The Minister of Employment and Labour should come clean on whether he has engaged any private medical aids or insurance providers to assist the Compensation Fund in processing and paying Covid-19 COIDA claims. If he hasn’t, he should do so post-haste.
The Compensation Fund should outsource the administration and payment of Covid-19 COIDA claims to the private sector so that the welfare of sick workers and their families can be assured.
We need to prevent a recurrence of the UIF Covid-19 Ters disaster at all costs.
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