Staff Reporter.
The Unemployment Insurance Fund may restart payments to help people unable to work because of the coronavirus outbreak, Cosatu said.
Progress was made in talks held this week at the National Economic Development and Labour Council, according to Matthew Parks, parliamentary coordinator for the Congress of South African Trade Unions. Nedlac is a forum for negotiations between business, labor and government.
“Government realizes it has to extend some form of relief,” Parks said by phone on Thursday. “We might need to consider a reduced monetary amount.”
While South Africa’s government and the UIF are under strain from the impact of a lockdown associated with the pandemic, this month’s re-imposition of curbs on industries including alcoholic beverages, restaurants and bars, is depriving people of an income.
An earlier program to compensate those who lost jobs temporarily because of the virus ended in October.
Thulas Nxesi, the labor minister, warned in November that the fund could collapse if forced to restart benefits for people who have lost income because of the restrictions.
Government initially committed R40 billion ($2.6 billion) from the fund, which is financed using workers’ monthly contributions, to subsidize the special benefits for three months.
The relief, which was given to those whose employers couldn’t afford to pay them or who were forced to take leave, was subsequently extended by a further four months until mid-October. Almost R53 billion has been dispensed to more than 4.7 million people so far.
While there have been reports that the UIF has R140 billion available that could be used to further extend the so-called Temporary Employer-Employee Relief Scheme, much of the money is tied up in investments such as bonds, property and equities, and can’t be easily accessed, according to Nxesi.
The fund will also need money to pay out regular unemployment claims to more than 1.5 million people in the near future, he said.
“If we blow this money on this temporary scheme, what will happen to the ordinary beneficiaries who have put their money into it?” he said. “We cannot collapse this fund.”
Talks are focusing on those who can’t work because of the latest curbs, people who are forced to quarantine, and those who need to stay home because they have co-morbidities or are elderly, Parks said. Talks may be completed by the end of next week, he said.
With almost 1.3 million confirmed infections and more than 35,000 deaths, South Africa is the country worst hit by the virus in Africa. The central bank has estimated the economy contracted by about 8% in 2020.