UIF expects jump in claims from retrenched workers
Fund puts aside R5.6bn for payouts
September 18, 2009
By SAMANTHA ENSLIN-PAYNE
The Unemployment Insurance Fund (UIF) is expecting a sharp increase in the number of retrenched workers claiming benefits and has earmarked R5.6-billion for payouts in the 12 months to March next year, 80 percent of which will be for unemployment benefits.
Sagren Govender, the executive manager of operations at the UIF, said yesterday: "It's an economic crisis. This year we need to provide for more unemployed workers."
So far this financial year 353 564 claims have been processed, of which 98 percent were approved and paid.
Those that had claimed were largely semi-skilled and lower-income earners, but middle- and some higher-income earners were also applying for unemployment benefits, which Govender said was not out of the ordinary.
In the year to March, the UIF paid out R3.8bn in total benefits. Of this, R2.8bn was paid to 474 793 retrenched workers, a 40 percent increase on the year before.
The fund normally caters for a 10 percent annual rise in the number of applicants, but for the current year it has factored in a 14 percent increase.
Nevertheless, it has catered for a 47 percent increase in the value of claims to R5.6bn for the current financial year.
"We always have more funds available than what we think we will need. We don't know when this crisis will end."
Unemployment payouts are expected to dip to R5.1bn in the year to March 2011, suggesting that the grip of the recession will begin to ease next year.
But the expected decline in payouts is also due to the fact that many who lose their jobs this year will have used up their benefits by next year.
Govender said that the UIF was doing all it could to help those who had lost their jobs, adding that a report that one in three applications were lost "was a total misrepresentation of the very good work that is done by the fund".
"If the fund had lost a third of the applications it received, there would surely be a crisis, given the important role that the fund is playing in providing income support to the unemployed," Govender said.
According to the UIF's annual report, 62 percent of the 627 244 claims paid out in the 2008/09 financial year were done so within the stipulated five weeks.
This is against the UIF's own target that 90 percent of claims be paid out in five weeks. Govender said the remaining claims not paid in the designated time were due to incomplete applications.
Yesterday labour lawyer Michael Bagraim said he stood by his comments about lost applications, but added that the problems did appear to be mostly in the Western Cape. He said it was encouraging to see that the UIF's management was taking the matter seriously.
Boas Seruwe, a UIF commissioner, confirmed that an investigation would be done in the Western Cape.
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