No work and still no UIF pay­out

The fund has bil­lions banked, but claimants say ac­cess­ing what they are due is a night­mare

Mail & Guardian - - Business - Thule­bona Mh­langa

The Un­em­ploy­ment In­sur­ance Fund (UIF) is awash with cash, with a sur­plus of R133.3-bil­lion, but those claim­ing ben­e­fits are be­com­ing in­creas­ingly frus­trated by in­ex­pli­ca­ble de­lays.

“Till this day, I am wait­ing for my pay­out … every time I went I was given the runaround and I would still like to be granted the sta­tus of my claim,” one frus­trated claimant re­sponded to an on­line sur­vey by the Mail & Guardian.

An­other said: “I was told that I don’t qual­ify after two months of go­ing through the process. I was sup­posed to be told from the on­set that I don’t qual­ify since they have my pro­file.”

Many other UIF claimants also com­plained, rat­ing the ser­vice and their ex­pe­ri­ence of lo­cal labour cen­tres as bad. But some did say the process went smoothly at some branches.

The UIF says on its web­site that the nor­mal turn­around time for a claim should be be­tween 14 to 21 days.

Claimants have to sup­ply a copy of their ID, a bank state­ment, proof they are a job seeker and com­plete an UI-19 form to con­firm they are un­em­ployed.

Un­em­ploy­ment is ris­ing — the lat­est Statis­tics South Africa fig­ure has risen to 27.7% — but em­ploy­ees’ pay­ments into the UIF in­creased by 6.4% last year to reach R18.2bil­lion, up from the pre­vi­ous year’s R17.1-bil­lion.

The UIF paid out R8.4-bil­lion last year com­pared with R7.6-bil­lion the year be­fore, ac­cord­ing to depart­ment of labour spokesper­son Te­boho The­jane — an in­crease of 10%. This amounts to 675 416 claims set­tled. He said 90% of sub­mit­ted ap­pli­ca­tions were pro­cessed in the 2015-2016 fi­nan­cial year.

The M&G’s re­spon­dents re­ported that long queues and bad cus­tomer ser­vice are typ­i­cally the pic­ture at labour cen­tres and that some of them had even given up on their claims.

“The process to claim for UIF ben­e­fits pay­out is sup­posed to be easy and ef­fi­cient, but this is not the case,” said one re­spon­dent.

Demo­cratic Al­liance MP Michael Ba­graim blames it on an ad­min­is­tra­tive sys­tem mal­func­tion. “We were promised by the di­rec­tor gen­eral of labour and his of­fi­cials about a year ago that the sys­tem will be moved to a pa­per­less one to solve all of these prob­lems but that has not hap­pened,” he said.

By law, con­trib­u­tors to the fund have the right to claim for re­tire­ment, un­em­ploy­ment or ma­ter­nity ben­e­fits. They pay 2% from their salary to the South African Rev­enue Ser­vice every month to­wards the so­cial se­cu­rity fund.

UIF spokesper­son Makhosonke Buthelezi con­firmed there is R133.3bil­lion in the fund and that for this year alone there was a sur­plus of R13.2-bil­lion.

The sur­plus “is ac­cu­mu­lated through con­tri­bu­tion and in­vest­ment rev­enue, which con­tin­ues to ac­cu­mu­late as we re­alise pay­ments from div­i­dends and other sources, such as in­ter­ests and penal­ties”, he said.

“While we pay be­tween R38mil­lion to R40-mil­lion in claims per day to an av­er­age of about 10000 peo­ple per day, the money is also dis­pensed via the labour ac­ti­va­tion schemes, which are aimed at re­train­ing re­trenched UIF con­trib­u­tors in var­i­ous skills that can help them to be em­ploy­able or start their own busi­nesses,” Buthelezi said.

“In some in­stances, the fund as­sists com­pa­nies in dis­tress to be pro­vided with turn­around so­lu­tions to help them back on their feet again and save jobs. Last year alone, 6 781 peo­ple ben­e­fited from the schemes at a cost of R145.5-mil­lion.”

He said the depart­ment is up­grad­ing its IT in­fra­struc­ture to speed up the pro­cess­ing of claims and this is at an ad­vanced stage, but he could not say when it would be com­plete.

The UIF ex­pects the sur­plus to be de­creased be­cause of re­cent amend­ments made to the Un­em­ploy­ment In­sur­ance Fund Act, which has in­creased the max­i­mum pay­out claims from R14 872 a month to R17 712.

Cur­rently ben­e­fi­cia­ries can claim ben­e­fits for eight months but this has been extended to 12 months. Women who have mis­car­riages will also be cov­ered by the amend­ments.

UIF ben­e­fits are based on a con­trib­u­tor’s gross in­come and so can dif­fer for each claimant, ac­cord­ing to the depart­ment.

The UIF is a public en­tity re­port­ing to the depart­ment of labour.

The­jane said the depart­ment re­grets the in­con­ve­nience caused by the up­grad­ing of its IT sys­tem but he said there can be other rea­sons for un­suc­cess­ful claims.

“If the con­trib­u­tor has vol­un­tar­ily re­signed, this may lead to an un­suc­cess­ful claim,” he said.

De­lays can also be caused by claimants sub­mit­ting in­cor­rect information, such as bank de­tails on their forms, and some­times em­ploy­ers give in­cor­rect rea­sons for un­em­ploy­ment on the UI-19 form.

In the case of ma­ter­nity ben­e­fi­cia­ries, if they do not claim UIF within six months, they for­feit the claim.

While the prob­lems at labour cen­tres per­sist, UIF con­sult­ing ser­vices are thriv­ing. They pro­vide pro­fes­sional ser­vices to make claims “has­sle-free” but they charge on av­er­age be­tween R350 and R500 for a claim. Most of the claims are for ma­ter­nity ben­e­fits.

But even this of­ten does not help those des­per­ately in need of un­em­ploy­ment ben­e­fits.

“I got my money when I was back at work,” said a re­spon­dent who ap­plied for a ma­ter­nity ben­e­fit.

The UIF has been un­der scru­tiny for the past four years be­cause of

“The process to claim for UIF ben­e­fits pay­out is sup­posed to be easy and ef­fi­cient, but this is not the case”

Over­come: The turn­around time of 14 to 21 days for UIF pay­outs is, in many cases, not be­ing met be­cause of ad­min­is­tra­tive and IT prob­lems. Photo: Oupa Nkosi

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