Photo by: Duane Daws
Finance Minister Nhlanhla Nene has extended the consultation period regarding proposed changes to the Unemployment Insurance Fund (UIF) contributions by one month, following discussions with labour and business at the National Economic Development and Labour Council (Nedlac).
In his 2015 Budget speech, in February, Nene proposed a reduction in the remuneration threshold against which contributions to the UIF were to be calculated from the current monthly amount of R14 872 to R1 000, for a period of one year. Benefit payments would remain unchanged.
Nedlac consultations on the proposal had been under way since February 27, following a post-Budget briefing. On March 4, the Minister also extended an invitation for public comment on the proposal by March 20.
National Treasury was processing the 44 public comments received, as well as comments received from Nedlac constituencies.
Government noted the concerns raised by Nedlac constituencies on the need to implement the UIF Amendment Bill to extend benefits to workers who contributed toward the fund, on the broader social security reform process and on the consultation process, as it affected stakeholders.
In light of the ongoing Nedlac discussions, the implementation of the UIF threshold reduction had been postponed. Final consultations would take place during April.
The new implementation date for the proposed threshold reduction was now set for May 1.
The Minister’s proposal aimed to provide much-needed support to the economy, putting about R15-billion back into the pockets of workers and employers. The reduction in the remuneration threshold would draw down on the UIF’s accumulated surplus, which currently stood at more than R72-billion.
The proposal would not materially affect the financial strength of the fund and was projected only to reduce the rate of surplus accumulation.